You know benchmarking matters. But where do you start? What data do you need? How do you turn numbers into action?
This guide walks you through the benchmarking process from start to finish—whether you're doing it yourself or working with a consultant.
Gather Your Current Plan Data
Before you can compare, you need to know exactly what you offer. Collect the following for each plan:
Data Checklist
Premium & Cost
- □Total monthly premium (EE only, EE+Spouse, EE+Child, Family)
- □Employer contribution amount or percentage
- □Employee payroll deduction amounts
Plan Design
- □Plan type (PPO, HDHP, HMO, EPO)
- □Deductible (in-network, single and family)
- □Out-of-pocket maximum
- □Coinsurance percentage
- □Copays (PCP, specialist, ER, Rx)
Where to Find This
- Summary of Benefits and Coverage (SBC): Required document with standardized plan details
- Summary Plan Description (SPD): Comprehensive plan document
- Carrier rate sheets: Premium details from your insurance carrier
- Your broker: They should have all of this readily available
Define Your Peer Group
Who are you competing against for talent? That's your peer group. The more specific, the more useful.
Industry
Start with your NAICS code or general industry category. Benefits norms vary significantly—tech companies offer different packages than manufacturers.
Example: "Professional Services" or more specific like "Software Publishers"
Company Size
Compare against employers of similar scale. A 100-person company has different economics than a 10,000-person enterprise.
Common bands: 1-50, 51-100, 101-250, 251-500, 501-1000, 1000+
Geography
Healthcare costs and talent markets are regional. Filter by state, region, or metro area depending on where you hire.
Consider: Where do your employees live? Where do you recruit from?
Don't Over-Filter
If your peer group gets too narrow, you won't have enough data points for meaningful comparison. Start specific and broaden if needed. A minimum of 20-30 peer employers is usually necessary for reliable benchmarks.
Get Your Benchmark Data
You have several options for obtaining benchmark data:
Ask Your Broker
Most brokers can provide benchmarking. However, broker data is often limited to their own book of business.
Cons: Limited scope, potential bias
Industry Surveys
Organizations like SHRM publish annual surveys. Data is self-reported and often 6-12 months old.
Cons: Self-reported, outdated, limited filtering
Consulting Firms
Large consulting firms (Mercer, WTW, Aon) offer comprehensive benchmarking services.
Cons: Expensive ($10K+), slow turnaround
Independent Data Platforms
Platforms like Bnchmrk provide validated benchmark data with flexible filtering. Data comes directly from plan sponsors and advisors.
Cons: DIY analysis (unless you add consulting)
Analyze the Results
Now you have data. Here's how to make sense of it:
Understand Plan Scores
A good benchmark report gives you a score that summarizes where you stand. The key insight: 50 is the target, not 100. A score of 50 means you match the market median—perfectly balanced with what similar employers offer.
Compare Holistically
Don't cherry-pick metrics. A low premium might come with a high deductible. Look at the full picture:
- Total cost to employer (premium contribution)
- Total cost to employee (premium + potential out-of-pocket)
- Plan richness (actuarial value)
- Choice (number and types of plans offered)
Find Your Top Performers & Under Performers
The overall score tells you where you land. The outliers tell you why:
Top Performers (75th percentile+)
Areas where you're notably richer than peers. Could be strategic differentiators or potential over-investments.
Under Performers (below 25th)
Areas where you lag behind peers. Could be genuine gaps or intentional trade-offs.
Take Action
Benchmarking without action is just an exercise. Here's how to turn insights into improvements:
If You're in the Limited Range (0-24)
- • Quantify the gap and the cost to close it
- • Prioritize: contribution rates often matter more than plan design
- • Build a business case for leadership with competitive data
- • Consider phased improvements over 2-3 years if budget is tight
If You're in the Balanced Range (25-74)
- • Document your position for leadership and recruiting
- • Look for optimization opportunities (same value, lower cost)
- • Consider non-medical benefits as differentiators
- • Monitor annually to maintain position
If You're in the Robust Range (75-100)
- • Decide if this is intentional (talent strategy) or accidental
- • If intentional, communicate this to employees—it's a selling point
- • If accidental, explore cost optimization without reducing competitiveness
- • Be cautious about cuts—takeaways are harder than additions
Repeat Annually
Benefits markets change. What was competitive last year may not be this year. Build benchmarking into your annual benefits cycle:
Suggested Timeline
Quick Reference Checklist
- □Gather current plan data (SBCs, rate sheets)
- □Define peer group (industry, size, geography)
- □Obtain benchmark data from reliable source
- □Understand your plan score (50 is the target)
- □Identify Top Performers and Under Performers
- □Build action plan based on Limited/Balanced/Robust position
- □Present to leadership with data
- □Schedule next annual benchmark
Ready to Benchmark Your Benefits?
Get a comprehensive benchmark report for your organization. See exactly where you stand and what to do about it.