August 27th, 2025
Rising Insurance Costs? 5 Ways to Support Your Employees Without Breaking the Bank
Health insurance premiums are rising sharply, and 2026 could be one of the toughest years yet for employers and employees. Proposed increases across Affordable Care Act (ACA) Marketplace plans average nearly 20%, with some insurers requesting hikes of more than 60% in certain states. Employer-sponsored coverage isn’t immune either, with costs already outpacing wage growth and general inflation.
For small business owners, this trend raises big questions: How will you keep coverage affordable, maintain employee satisfaction, and protect your bottom line?
↗️ What’s Driving the Increases
-
Medical Costs Rising: Labor shortages, higher drug prices, and increased service utilization are pushing costs up.
-
Policy Shifts Tariffs on medical supplies and the expiration of enhanced premium subsidies are reducing affordability.
-
Shrinking Risk Pools As healthier people leave the market, insurers spread costs across a sicker, more expensive pool.
The result? Higher premiums paired with deductibles nearing $5,000 on ACA plans—double what they were a decade ago.
↗️ What This Means for Your Team
-
Employees May Face Sticker Shock: Even if you offer employer-sponsored insurance, higher premiums and deductibles could make benefits feel less generous.
-
Recruitment & Retention Risks: As healthcare costs become a top concern, employees will weigh benefits heavily in deciding where to work.
-
Potential for Coverage Gaps Rising costs could push some employees to forgo coverage, creating risks for their financial and personal well-being.
↗️ Steps Small Businesses Can Take
-
Review Your Plan Options Early
Engage your broker or benefits advisor now. Some carriers may offer less expensive networks, level-funded options, or new plan designs that reduce costs.
-
Explore Tax-Advantaged Solutions
Consider Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs). These can offset high deductibles and help employees stretch their healthcare dollars.
-
Communicate With Your Team
Be transparent about rising costs and what you’re doing to manage them. Employees value honesty and proactive planning.
-
Consider Supplemental Benefits
Products like telehealth access, critical illness coverage, or even wellness stipends can help employees feel supported without drastically raising costs.
-
Benchmark Against Peers
Look at what similar-sized businesses in your industry are offering. Staying competitive on benefits is key to retention.
↗️ Bottom line
Healthcare costs are climbing, and small businesses can’t afford to ignore the trend. By planning ahead, reviewing your benefit strategy, and exploring creative solutions, you can shield your employees from the worst of these increases—and protect your business from talent loss.
