Approximately 165 million Americans have health insurance through their jobs, but most of them are reluctant to consider what their employer offers as a benefit and how much it costs. I don't spend a lot of time on that.
In fact, employees spent only about 45 minutes per yearOn average, people decide which benefits option is best for them, the Aon report found.
open enrollment seasonwhich typically runs until early December, is an opportunity to take a closer look at what's at stake.
And, first of all, costs have increased significantly.
costs are rising
Healthcare costs have been rising steadily for many years. Recently, there has been a noticeable uptick.
For employers, these increasing costs are reaching a breaking point. Post-pandemic highsaccording to consulting firm WTW, formerly known as Willis Towers Watson. U.S. employers expect health care costs to increase by 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023, the company said.
Higher costs are causing employers to consider new ways to adjust plan offerings, according to WTW research.
At that time, 52% of companies said they plan to implement programs to reduce overall costs, and an equally large number of companies intend to shift to lower-cost healthcare providers and facilities. This may narrow the network of doctors you can choose from.
Employers currently subsidize about 81% of the cost of health insurance plans on average, with employees paying the rest, according to the professional services firm. Aon.
However, some of the higher costs will inevitably be passed on to employees as well.
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According to the WTW report, approximately one-third (34%) of employers will reduce some of their costs over the next year by increasing premiums or increasing copays for high-deductible health plans. The company hopes to pass the cost on to its employees.
Costs per employee are expected to increase by an average of 5.8% in 2025, with health benefit costs increasing for the third consecutive year. 5% or moreThe 10-year average was only about 3%, according to another report by consulting firm Mercer.
“These are changes that employees will feel,” said Beth Amland, research director for health and benefits at Mercer.
Healthcare costs are already high for workers. Family premiums for employer-provided health insurance increased 7% this year to an average of $25,572. KFF's 2024 Benchmark Employer Health Survey Found it. More than $6,200 of this will be paid by the worker, and the rest by the employer.
“As rising costs reach post-pandemic highs, companies are concerned about the strain on their employees, especially as they impact coverage and care decisions,” Tim Stawicki, chief actuary at WTW, said in a statement. ” .
Consider medical costs
Employees are often presented with options to select a health insurance plan. There are two options: one with a higher monthly cost called a premium and a lower deductible that must be paid before your employer's plan starts. Your out-of-pocket costs will be higher, but your insurance premiums will be lower.
“When you go through open enrollment, the first thing you almost always see is deductible costs and out-of-pocket costs,” said Regina Ilke, WTW's health, equity and human services leader for North America.
Gary Kushner, chairman and president of benefit design and management firm Kushner & Company, advises using past years as a guide when weighing your options.
She says people need to consider, “Am I a family with low, medium, or high insurance claims? Have I had an event that requires emergency treatment, or do I basically need more preventive treatment?” said.
If you usually only go to the doctor for a checkup once a year, for example, you may want to choose a so-called high-deductible plan, which has lower monthly costs.
health savings account
More than 50% of employers offer high-deductible health insurance plans; health savings accountor an HSA, can help alleviate additional medical costs.
To use an HSA, you must be enrolled in an eligible high-deductible health plan. The IRS defines a “high deductible” in 2025 as at least $1,650 for a personal plan and $3,300 or more for family coverage.
The IRS also determines the maximum allowable contributions each year. HSA contribution limits Premiums in 2025 will be $4,300 for individuals (up from $4,150 in 2024) and $8,550 for families (up from $8,300 in 2024). Employees age 55 and older can make additional contributions of $1,000 above the IRS annual limit.
HSA contributions then grow on a tax-free basis, and the funds can cover out-of-pocket expenses such as doctor's visits and prescription drugs, including expensive weight-loss drugs.
As costs continue to rise, HSAs are an important safety net for managing these out-of-pocket costs, WTW's Ihrke said. Unused money can be carried over to the next year.
“Make sure to consider ways to put money into that savings account, so you can pay your doctor's bills or save for the future,” Ilke explained.
Life and disability insurance
Open enrollment may also present employees with a variety of disability and life insurance options, which are often included in standard benefits packages.
A life insurance policy issued by an employer is typically equivalent to one year's salary. You can purchase additional life insurance through your employer. This is called supplemental life insurance or voluntary insurance, and is optional coverage that can be added to your employer's basic group insurance policy.
There are two basic types of disability insurance. Short-term disability typically replaces 60% to 70% of your base salary, and premiums are often paid by your employer. Long-term disability usually begins after three to six months and typically replaces 40% to 60% of your income.
Even if you have these policies through your job, they may only be a fraction of what you need to protect your young children or other dependents.
Consider the amount that's right for you and your family, and weigh whether to purchase additional coverage or supplemental insurance through your workplace's group plan or on your own. This is a policy recommended by many advisors.
Utilize voluntary benefits
Additional benefits may be optional, but these days, they're just as important, especially when it comes to happiness. A recent report found that nearly one in five employees said their mental health worsened when they transitioned to open recruitment. gallagher.
“Now more than ever, employers are seeking to meet the expanding needs of their workforce,” said Tom Kelly, president of Gallagher's Health and Benefits business. We are asking for welfare support.”
