Brace yourself: U.S. businesses are facing the largest spike in health insurance costs in over 15 years. Costs for employer-sponsored health coverage are expected to surge by about 9.5% in 2026, according to The Wall Street Journal. A separate employer survey, also cited by the WSJ, puts the estimate close behind at 9.2%. Both projections would mark the steepest rate of increase since at least 2011.
And it’s not just the percentage increase that’s shocking. The base cost of coverage has ballooned over the last decade: the average cost for a family plan is now approaching $25,500 per year. With numbers like that, even a single-digit hike can translate into tens or hundreds of thousands in additional spend for employers.
Smaller and mid-sized employers who don’t buy healthcare the way Fortune 500s do are especially vulnerable as carriers tighten margins and pass rising costs downstream. Most mid-sized employers remain stuck in the fully insured model, which offers little visibility into what they’re paying for and even less power to change it.
Fortunately, there’s a smarter way to avoid these skyrocketing costs, one that doesn’t require slashing coverage or raising premiums for your employees.
Fully insured health plans, what most employers default to, are under more pressure than ever. Health systems are renegotiating higher reimbursement rates. The cost of specialty drugs continues to climb. And utilization remains elevated in the wake of pandemic-era delays in care.
All of that is baked into the premiums that you will soon see on your renewal.
But here’s the catch: fully insured plans give you almost no visibility into what you’re actually paying for, and even fewer options when it comes to reducing overall costs.
If you think your health insurance premium is going straight toward paying for care, think again. In a fully insured plan, a significant portion of your premium, often 25% or more, is allocated for risk margins and profit padding. This cushion helps carriers make money, but it does nothing to protect your bottom line. And if your team’s actual claims come in under budget?
The insurer keeps the difference. Not you.
That’s exactly what EVHC helps you do.
We work with mid-sized employers to implement alternative funding strategies that put you back in control of your healthcare spending. You only pay for the care your employees actually use, not for an insurer’s worst-case scenario.
With EVHC, you can:
This is the playbook large Fortune 500s have used for decades. EVHC makes it accessible to employers like you with white-glove support and a team that works hand-in-hand with your broker.
The renewal conversation can feel like a no-win situation: raise employee contributions, increase deductibles, or face ballooning premiums. At EVHC, we believe in empowering brokers and employers with clarity and choice.
If you’re expecting another premium hike, now is the time to act. Let’s explore whether an alternate funding model could help you break the cycle and build a more sustainable, employee-centered benefits strategy.
Ask your broker about alternate funding options with EVHC, or connect with us directly to start a conversation.
Resources:
WSJ: Health Insurance Costs for Businesses to Rise by Most in 15 Years
EVHC: Pulling Back the Curtain on Fully Insured Health Plans
EVHC: Employer Solutions Overview
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