As the open enrollment season approaches, millions of Americans relying on employer-sponsored insurance plans are bracing for significant increases in health care costs. According to a recent report from consulting firm WTW, U.S. employers anticipate a 7.7% increase in health care costs for 2025, up from 6.9% in 2024 and 6.5% in 2023. This trend signals a challenging financial landscape for employees who may see their premiums, co-pays and deductibles rise.
Understanding the cost-sharing dynamics
Currently, employers subsidize about 83% of health care costs, leaving employees to cover the remaining balance. However, a survey by Mercer reveals that 53% of employers plan to shift more expenses onto employees in the coming year. This shift could result in an average cost increase of approximately 5.8% per employee in 2025.
Evaluating your health care options
With rising costs, now is the time for employees to reassess their health care coverage. Gary Kushner, chair and president of Kushner & Company, emphasizes the importance of understanding your health care needs. Employees should consider the following questions: Am I a low, medium or high-claims family? Did I have any incidents requiring acute care or extensive preventative care?
For those who typically only visit the doctor for annual check-ups, opting for a high-deductible plan with lower monthly premiums may be a viable option.
Utilizing Health Savings Accounts
Employees enrolled in high-deductible health plans can benefit from Health Savings Accounts (HSAs). To qualify for an HSA, one must have a high-deductible health plan, defined by the IRS as having a deductible of at least $1,650 for individual coverage or $3,300 for family coverage. HSAs allow employees to save money tax-free for medical expenses, and any unused funds roll over to the following year, making them a strategic tool for managing out-of-pocket costs.
Maximizing voluntary benefits
In addition to traditional health care plans, employees are encouraged to explore voluntary benefits offered by their employers. These may include: gym discounts, childcare assistance, stress management programs and financial coaching.
Taking advantage of these benefits can help alleviate financial stress and improve overall well-being, contributing to a healthier work-life balance.
As health care costs continue to rise, it is crucial for employees to stay informed and proactive during the open enrollment period. By understanding their health care needs, evaluating their options and utilizing available resources, employees can make informed decisions that align with their financial and health goals.
