Employee benefits benchmarking is the process of comparing your organization's benefit plans (their design, employee contributions, and costs) against verified data from similar companies in your industry, region, and size band. It answers a fundamental question: How do our benefits stack up?
Employers use it to check whether their benefits are competitive and fairly priced. Brokers and consultants use it to walk into a client renewal with evidence instead of opinion.
This guide covers what benchmarking is, why it matters, what metrics to track, how brokers run a benchmark for a client renewal, and how to use benchmark data effectively.
Benchmarks from verified U.S. employer plan data
of U.S. employers offer a PPO medical plan
Bnchmrk data →fully-insure their health plan
Bnchmrk data →offer three or more medical plan options
Bnchmrk data →Based on verified plan data from 14,000+ U.S. employers and 95,000+ plans.
What is Benefits Benchmarking?
Benefits benchmarking compares your health insurance, retirement plans, and other employee benefits against a relevant peer group. Instead of guessing whether your benefits are competitive, you get data-driven answers.
A good benchmark answers questions like:
- Are our premiums higher or lower than similar employers?
- What percentage of premium do peers pay vs. employees?
- How do our deductibles and out-of-pocket maximums compare?
- Are we offering the right plan types for our workforce?
Why Benefits Benchmarking Matters
Benefits are a significant cost, often the second-largest expense after payroll. They're also a key driver of talent attraction and retention. Benchmarking helps you optimize both.
Talent Competition
Candidates compare offers. If your benefits lag the market, you'll lose talent to competitors, even if your salary is competitive.
Cost Optimization
Benchmarking reveals where you're over- or under-spending. You might be paying above-market premiums without realizing it.
Renewal Negotiations
When carriers propose increases, benchmark data gives you leverage. You can push back with market evidence.
Strategic Planning
Long-term benefits strategy requires knowing where you stand today. Benchmarks provide the baseline for planning.
Understanding Plan Scores
Good benchmarking gives you a score that summarizes where your plan stands compared to peers. But here's the key insight most people miss:
50 is the target, not 100.
A score of 50 means your plan matches the market median, perfectly balanced with what similar employers offer. Scores above 75 aren't automatically better; they indicate richer benefits that may or may not align with your strategy and budget.
The right question isn't "How high is the score?" but "Is this score aligned with our goals?" A score of 35 might be exactly right for a cost-conscious organization. A score of 80 might be intentional for a company competing aggressively for talent.
Key Metrics to Benchmark
Not all metrics are equally important. Focus on these core areas:
Premium Costs
Total monthly premium for single and family coverage. This is the most common starting point for benchmarking.
Employer Contribution
The percentage of premium the employer pays vs. what employees pay. This directly impacts employee take-home pay.
Deductibles & Out-of-Pocket Maximums
How much employees pay before insurance kicks in, and their maximum annual exposure.
Plan Type Mix
PPO vs. HDHP vs. HMO vs. EPO. The mix of plan types offered says a lot about your benefits philosophy.
Funding Arrangement
Whether the plan is fully-insured, self-insured, or level-funded. Funding changes who carries the claims risk and how much flexibility the employer has on plan design.
Beyond Medical: Dental, Vision, and PTO
Medical gets the attention, but candidates compare the whole package. Dental and vision contributions and plan design, plus paid time off, are often where a program quietly falls behind.
Finding Top Performers & Under Performers
The overall score tells you where your plan lands. The outliers tell you why. These are the metrics that stand out from your peers:
Top Performers (75th percentile+)
Areas where your plan is notably richer than peers. These might be:
- • Strategic differentiators worth highlighting
- • Potential over-investments to evaluate
- • Selling points for recruiting
Under Performers (below 25th percentile)
Areas where your plan lags behind peers. These might be:
- • Genuine gaps affecting retention
- • Intentional trade-offs for cost control
- • Priority areas for improvement
Top Performers and Under Performers are where the real conversations happen. They help you understand not just where you stand, but what to do about it.
Choosing the Right Peer Group
The value of a benchmark depends entirely on who you're comparing against. "National averages" are rarely useful. Instead, filter by:
Industry
Tech companies benchmark against tech. Healthcare against healthcare. Industry norms vary significantly.
Company Size
A 50-person company shouldn't benchmark against Fortune 500 employers. Size bands matter for realistic comparisons.
Geography
Healthcare costs vary dramatically by region. A California employer faces different economics than one in Ohio.
Pro Tip
The best benchmarks combine multiple filters. "Technology companies with 100-500 employees in the Northeast" is far more actionable than "all U.S. employers."
The wrong peer group can be worse than no benchmark. Compare a client against richer peers and you may push expensive plan changes that don't fix anything. Compare against a weaker group and a real gap, the one quietly driving turnover, stays hidden. Getting the peer group right is the most important decision in any benchmark.
See it in action: explore real benchmarks by industry or by location in our free data hub.
Where Benchmark Data Comes From
Not all benchmark data is created equal. Understanding the source helps you evaluate its reliability:
Self-Reported Surveys
HR professionals fill out surveys about their benefits. Prone to errors, inconsistent definitions, and response bias. Often annual and quickly outdated.
Broker Book-of-Business
Data from a single brokerage's clients. Limited scope, potential conflicts of interest, and reflects what one firm sells rather than the broader market.
Validated Direct-Source Data
Data submitted directly by plan sponsors and benefits consultants from actual plan documents, then validated through multiple checks. No third-party aggregators. This is what Bnchmrk uses: real plan data from real employers, updated in real time.
How Brokers Run a Benchmark for a Client Renewal
When a client asks "are our benefits competitive?", they really mean: compared to whom, on what, and what should we do about it? Here is the workflow brokers and consultants use to answer that with data.
- 1
Step 1: Start with the client's question
Pin down the decision the benchmark has to support: a renewal increase to push back on, candidates turning down offers, or a contribution change leadership wants to justify. The question decides which metrics and which peer group matter.
- 2
Step 2: Collect the actual plan documents
Work from the SBCs, rate sheets, and contribution schedules, not from what the client remembers offering. Gaps between the two are common and worth catching before any comparison.
- 3
Step 3: Build a matched peer group
Filter by industry, state, and company size. Keep it tight enough to be relevant and large enough to be credible: dozens of comparable employers, not a handful.
- 4
Step 4: Score each plan against the peer group
Compare plan design, contributions, and premiums plan by plan. On Bnchmrk, each plan gets a score from 0 to 100 where 50 is the peer median, and the Top Performers and Under Performers show exactly which metrics drive it.
- 5
Step 5: Sort the findings: below, above, or misaligned
Below market on something the client's talent pool cares about is a recruiting risk. Above market on something employees don't value is a cost to revisit. Misaligned means the benefit doesn't fit the workforce, wherever it lands against the benchmark.
- 6
Step 6: Turn it into a renewal recommendation
Translate the comparison into specific, prioritized moves: adjust the family contribution, add an HDHP option, or use the market data as leverage in the carrier negotiation. The benchmark is the evidence; the recommendation is the advice.
- 7
Step 7: Re-run it before every renewal
A benchmark from two years ago describes a market that no longer exists. Re-benchmark ahead of each renewal, and again after big workforce changes. Bnchmrk's data refreshes daily, so the comparison stays current.
Benchmarking your own company instead? Follow the step-by-step guide for employers. For how advisors use benchmarks to win new business, see the consultant's guide.
Using Benchmarks Effectively
Benchmarking data is a tool, not an answer. Here's how to use it well:
Do:
- Target the Balanced range (25-74) for sustainable positioning
- Use Top Performers and Under Performers to focus conversations
- Consider your organization's unique strategy and culture
- Re-benchmark annually to track trends
Don't:
- ✕Assume Robust (75+) is always better; it may signal over-investment
- ✕Ignore context when comparing data points
- ✕Make major decisions on a single metric
- ✕Use outdated or unvalidated data sources
Frequently asked questions
What is employee benefits benchmarking?
Employee benefits benchmarking is the process of comparing an employer's benefit plans (their design, employee contributions, and costs) against verified data from a peer group of similar companies by industry, location, and size. It replaces guesswork and survey self-reporting with real plan data, so employers can see exactly how competitive their benefits are.
How do you benchmark employee benefits?
Build a peer group that matches your company by industry, region, and employee size; compare your plan design, employee contributions, and premiums against that cohort's verified plans; and score where each plan lands versus peers. Repeat before each renewal so decisions are grounded in current market data rather than last year's survey.
How do brokers use employee benefits benchmarking?
Brokers and consultants use benchmarking to walk into a renewal with evidence instead of opinion. They build a peer group that matches the client by industry, state, and company size, score each plan against it, and use the results to support contribution changes, plan design recommendations, and carrier negotiations. It also helps brokers compete for new business in markets where they don't yet have a deep book of clients.
What data is used for benefits benchmarking?
The most reliable benchmarking uses verified employer plan data rather than voluntary survey responses. Bnchmrk benchmarks real medical, dental, vision, life, disability, and stop-loss plans across industries, all 50 states, and company-size bands, so comparisons reflect what employers actually offer.
What is the difference between a benefits survey and benefits benchmarking?
A benefits survey is a data collection method: HR teams self-report what they offer, and the results are typically published once a year. Benchmarking is the act of comparing one employer's plans against a matched peer group. A benchmark is only as good as the data underneath it, so the key question is the source: self-reported survey answers lag the market and vary in how respondents define things, while verified plan data comes from actual plan documents and can be refreshed continuously.
What percentage of employers offer a PPO plan?
About 75% of U.S. employers offer a PPO medical plan, according to Bnchmrk's verified plan data, making PPO the most common medical plan type, ahead of HDHP and HMO.
What percentage of employers offer a high-deductible health plan (HDHP)?
About 65% of U.S. employers offer an HDHP, according to Bnchmrk's verified plan data, making it the second most common medical plan type after the PPO. Many employers offer an HDHP alongside a PPO rather than as the only option.
Are most employers self-funded or fully-insured?
About 64% of employers fully-insure their health plans, while the rest self-fund or use level-funded arrangements, according to Bnchmrk's verified data. Self-funding is more common among larger employers.
How often should you benchmark employee benefits?
At least once a year, ahead of renewal and open enrollment, so you're negotiating and designing plans against current market data. Many employers also benchmark when entering a new market, after rapid headcount growth, or when turnover signals a competitiveness problem.
Can small and mid-sized employers benchmark their benefits?
Yes, and the peer group matters even more for them. A 75-person company compared against large enterprises will look uncompetitive on some measures and overly generous on others, because the cost structures are different. The fix is a size-matched peer group. Program structure varies widely too: nationally, about 17% of employers offer a single medical plan while 54% offer three or more, according to Bnchmrk's verified data, so the national mix is the wrong yardstick for any one employer.
Prevalence figures reflect Bnchmrk's verified employer plan data; see Benchmark Stats for current numbers by benefit, industry, and state.
See How Your Benefits Compare
Get a benchmark report for your organization and see exactly where you stand against your peers.