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US employers keep passing rising healthcare costs to workers. There are better options
US employers are facing an expected 8.2% rise in health benefit costs per employee in 2027, the biggest increase since 2003, and many are passing a growing share of the bill to workers. The article argues that shifting costs this way can be shortsighted and says employers, particularly smaller businesses, have other ways to manage spending while offering health benefits.
Options include individual coverage health reimbursement arrangements, which let employers reimburse staff for their own insurance, and health savings accounts linked to high-deductible plans. Some smaller firms are also adopting self-insured or level-funded plans, negotiating discounted rates with local providers and pharmacies, or paying consultants to help employees choose suitable cover. The article says ICHRA uptake among employers with fewer than 100 staff grew by 73% to 128%, while noting these approaches take time to set up.
In short
- Employers expect health benefit costs to rise 8.2% in 2027.
- Workers are bearing a growing share of healthcare costs.
- Reimbursement accounts and other plans offer employers alternatives.
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The case for
With health benefit costs rising sharply, employers may need to ask workers to contribute more to keep cover affordable for the business and preserve jobs or wages. Cost-sharing can also encourage employees to consider the price of care, while options such as reimbursement arrangements, savings accounts and alternative funding plans may take time, expertise and money to implement.
The case against
Passing more of the increase to workers can make healthcare harder to afford and leave employees bearing costs they have limited ability to control. Employers have other ways to manage spending, including reimbursement arrangements, negotiating local rates and helping staff select suitable cover, which may protect benefits while addressing costs more thoughtfully.
Explained simply
In the US, many people get health insurance through their job, with employers paying some or all of the premium and workers often contributing too. Employers also choose how their plans are arranged, so changes to benefit costs can affect both businesses and their staff.
Smaller employers may have fewer resources to manage health spending than large companies, but they can consider different ways to provide cover. These include reimbursing workers for individual insurance policies, using plans with higher deductibles alongside health savings accounts, or negotiating prices with local providers.
Each approach has different costs and rules, and some take time and specialist help to set up. The choices matter because they shape what employers pay and how much workers contribute or pay when they need care.
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