How Light Labs pivoted from a finished renewal to $113,115 in savings

Light Labs, a technology company in Austin, runs payroll and HR through Gusto, and like a lot of companies on Gusto, bought its health insurance through the brokerage bundled into the same platform. With renewal season handled in-house, the team did what the system asked: when Gusto opened enrollment, employees picked their plans, contributions were set, and the box was checked.

The problem was the number underneath it. Blue Cross Blue Shield of Texas came back with a renewal quote of $467,755: a 21% jump over the $385,795 the company paid the year before. That’s an $82,000 increase on a single line item. Nothing about the group justified it; Light Labs is a healthy population with controllable medical spend. The rates were simply the rates the carrier had filed, and no one had taken the plan to market to test them. On top of that, the plans were age-banded, meaning every employee paid a different rate based on age, an administrative headache that quietly penalizes a young, growing team.

By the time Ignition got into the conversation, enrollment was already done and the June 1 effective date was two to three weeks out. The easy answer was to let it ride and fix it next year.

Ignition didn't wait for next year. The team took Light Labs' plan to market and came back with a level-funded option through Aetna that beat the renewal on both price and coverage, enough that the CEO made the call to redo open enrollment from scratch.

That's the part most brokers won't touch. Ignition contacted Gusto, had the completed open enrollment taken down, and rebuilt everything from the ground up: new plans, new rates, new contributions. Ignition reopened enrollment and ran it personally, leading the open enrollment meeting and walking through plan choices one-on-one with roughly half the company by phone and email. Rather than default employees into the most expensive plan (where many had landed simply because they didn't understand how a deductible worked), Ignition explained the tradeoffs in plain English and helped each person choose the plan that actually fit their needs. The whole rebuild  took about two weeks. Ignition extracted the census from Gusto, submitted to the carriers, and re-enrolled every employee.

The new plan also fixed the structure, not just the price. Ignition moved Light Labs from age-banded to composite rates, so the company's cost no longer swings with each employee's birthday. And throughout, Gusto stayed in place for payroll and HR. No platform migration, no new systems to learn.

A 21% increase became an 8% decrease: $113,115 below the renewal quote.

The Aetna plan came in at $354,640 a year, down from the $467,755 renewal Light Labs was about to accept. That’s $113,115 in savings. It also landed $31,155 below what the company paid the prior year, so Light Labs didn't just blunt a hike. It ended up paying less than before. Ignition also negotiated a carrier credit of $400 per enrolled employee against the first month's bill, putting several thousand more back on the table.

Better coverage, not a cheaper downgrade.

The savings didn't come from gutting benefits. On the top plan, the deductible dropped from $350 to $0 and coinsurance went from 80% to 100% paid by the plan. Employees got a stronger plan for less money, and because Ignition took the time to educate the team, many chose lower-premium plans that fit them better, saving themselves money individually on top of the company's savings.

Light Labs is in control of future renewals.

The fix wasn't a one-year discount; it reset the company's starting position for every renewal that follows. With a healthy group, a clean plan structure, and a broker actively taking the plan to market each year, Light Labs can expect to keep seeing favorable numbers. And if a rate ever does move, they'll know exactly why instead of being told "the rates went up." It also opens the door to bigger structural moves down the line, like a partially self-insured or captive arrangement, that can drive costs down further.

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