Health-Benefit Costs Rose 6%. What Could Change at Open Enrollment?

Health-Benefit Costs Rose 6%. What Could Change at [Open Enrollment](/enrollment)?

Rising employer health costs may reach workers through higher payroll deductions, deductibles, copayments, narrower provider networks or changes in covered benefits. This open-enrollment checklist can help employees and small businesses compare what is actually changing.

Employer health-benefit costs are rising considerably faster than private-sector wages.

The Bureau of Labor Statistics reported that health-benefit costs for private-industry employers increased 6% during the 12 months ending in June 2026. Private-industry wages and salaries increased 3.1% during the same period. Overall benefit costs, which include more than health coverage, rose 3.8%. Bureau of Labor Statistics

That difference matters as employers prepare their health plans for the next open-enrollment period. When the cost of coverage grows faster than wages, employers have several choices. They can absorb more of the increase, require workers to contribute more, change the plan or combine several approaches.

Employees should therefore look beyond the monthly premium. A plan that appears affordable in payroll deductions can still become more expensive through a higher deductible, different prescription coverage or the loss of an important physician from the network.

What does a 6% increase actually mean?

The Bureau of Labor Statistics figure measures the change in employer health-benefit costs across private industry. It does not mean every employer or every worker will experience an exact 6% increase.

An employer’s actual renewal will depend on factors such as:

• The size and health needs of the covered workforce
• Medical and prescription-drug use
• Local hospital and physician prices
• The employer’s contribution strategy
• The plan’s provider network
• Whether the plan is fully insured or self-funded
• Changes in deductibles, copayments and coinsurance
• The availability of competing insurers and plan options

The direction is still clear. Health coverage is consuming a growing share of employer compensation costs.

The longer-term cost pressure is also visible in national premium data. KFF reported that the average annual premium for employer-sponsored family coverage reached $26,993 in 2025, an increase of 6% from 2024. Workers contributed an average of $6,850 toward that cost. The average deductible for single coverage among workers enrolled in a plan with a general annual deductible was $1,886. KFF 2025 Employer Health Benefits Survey

Those averages will not describe every workplace, but they provide useful context for evaluating an employer’s open-enrollment changes.

How rising costs can reach workers

Employers do not have to pass an insurance renewal increase to workers in one obvious line item. The cost can move through several parts of the plan.

1\. Higher employee premium contributions

The amount deducted from each paycheck may increase even if the insurer and plan name stay the same.

Employees should calculate the annual contribution, not simply compare one payroll deduction. A $25 increase per biweekly paycheck adds $650 to annual household costs.

Family coverage may also increase at a different rate than employee-only coverage. Employers sometimes continue subsidizing the employee’s premium while requiring workers to pay a larger share for spouses or children.

2\. Higher deductibles

The deductible is the amount a member generally must pay for covered services before the plan begins paying its share, although some services may be covered before the deductible.

A lower payroll deduction can be offset by a substantially higher deductible. This matters most for employees who expect surgery, frequent diagnostic testing, specialist care or other significant medical use during the year.

Employees should also determine whether the plan has separate deductibles for medical care and prescription drugs.

3\. Changes in copayments or coinsurance

A plan may keep the deductible relatively stable while increasing what members pay when they receive care.

A copayment is usually a fixed amount, such as $40 for a specialist visit. Coinsurance requires the member to pay a percentage of the allowed cost. Paying 20% of a service creates more financial uncertainty than paying a fixed copayment, especially for imaging, outpatient procedures and hospital care.

4\. Narrower provider networks

An employer may control costs by offering a plan with fewer participating hospitals, physicians or other healthcare professionals.

A narrower network is not automatically a poor choice. It can work well when the included providers meet the employee’s needs. The risk comes from assuming that a physician who participated this year will remain in-network next year.

Employees should verify the network with both the insurer and the provider. Online directories can be outdated, and a medical group’s participation does not always mean every physician or facility within that group participates.

5\. Changes in prescription-drug coverage

Prescription coverage can change even when the medication remains technically covered.

A drug may:

• Move to a more expensive tier
• Require prior authorization
• Become subject to step therapy
• Have a new quantity limit
• Move under a separate prescription deductible
• Be excluded from the formulary
• Require use of a designated pharmacy or mail-order service

Employees taking regular medications should review the new formulary and estimated annual cost for each prescription.

6\. Changes in plan design

Employers may introduce or expand high-deductible health plans, health savings accounts, tiered networks, centers of excellence, telehealth services or disease-management programs.

Each feature should be evaluated based on how it works in practice. A travel requirement for a designated surgical center, for example, may save money for one employee and create a serious access problem for another.

The open-enrollment comparison checklist

Do not compare plans based on the premium alone. Use the following checklist for every available option.

Payroll cost

• What will be deducted from each paycheck?
• How many pay periods are there?
• What is the total annual employee contribution?
• What does coverage cost for a spouse, children or the full family?
• Has the employer changed its contribution?
• Is there a surcharge for covering a spouse who has access to another employer’s plan?
• Are tobacco or wellness-program surcharges applicable?

Deductibles and maximum exposure

• What is the individual deductible?
• What is the family deductible?
• Does the family deductible operate as an embedded or aggregate deductible?
• Is there a separate prescription-drug deductible?
• What is the in-network out-of-pocket maximum?
• Is there a separate out-of-network deductible or maximum?
• Which expenses do not count toward the out-of-pocket maximum?

The out-of-pocket maximum should be reviewed carefully, but it is not a complete estimate of financial risk. Premiums, noncovered services and some out-of-network charges generally do not count toward it.

Provider network

• Is your primary care physician in-network?
• Are your specialists in-network?
• Is your preferred hospital included?
• Are the laboratories, imaging centers and outpatient facilities you use included?
• Are behavioral-health providers available within a reasonable distance?
• What happens when an in-network facility uses an out-of-network professional?
• Does the plan provide any out-of-network coverage?
• Are referrals required before seeing a specialist?

Save screenshots or written confirmation when continued access to a particular provider affects the decision.

Prescription coverage

• Is every regular medication on the new formulary?
• What tier applies to each medication?
• What will a 30-day and 90-day supply cost?
• Does the medication require prior authorization or step therapy?
• Must specialty medications be obtained from a designated pharmacy?
• Are manufacturer assistance or copay-support payments credited toward the deductible and out-of-pocket maximum?
• What is the process for requesting a medical exception?

Expected healthcare use

Consider what the household is reasonably likely to need during the coming plan year:

• Regular primary care or specialist visits
• Ongoing prescriptions
• Pregnancy or fertility care
• Planned surgery
• Physical or occupational therapy
• Behavioral-health treatment
• Medical equipment
• Care for a chronic condition
• Pediatric or dependent care

No one can predict every medical event. The purpose is to compare the plan against known needs and understand the cost if an unexpected high-use year occurs.

Employer accounts and tax considerations

• Is the plan eligible for a Health Savings Account (HSA)?
• How much will the employer contribute to the HSA?
• When will the employer contribution be deposited?
• Is a Health Reimbursement Arrangement (HRA) available?
• Is a healthcare Flexible Spending Account (FSA) available?
• What are the contribution, rollover and spending deadlines?
• Will changing plans affect eligibility to contribute to an HSA?

Tax treatment and eligibility can depend on the plan and the employee’s circumstances. Employees with questions should consult their benefits department or a qualified tax professional.

Use plan documents, not the benefits presentation alone

Open-enrollment presentations and comparison charts can be useful, but they are summaries. The underlying plan documents contain the controlling details.

The Department of Labor identifies two documents that employees should review:

Summary of Benefits and Coverage (SBC): This standardized document explains major covered benefits, cost-sharing requirements and coverage limitations. Plans generally must provide it with enrollment materials and upon renewal. Department of Labor reporting and disclosure guide

Summary Plan Description (SPD): This document explains how the plan operates, who is eligible, what the plan covers, how claims work and what rights participants have. If the plan changes, participants generally must receive a revised SPD or a Summary of Material Modifications (SMM). Department of Labor plan-information guidance

The Employee Retirement Income Security Act of 1974 (ERISA) establishes disclosure and other protections for most voluntarily established private-sector employer health plans. It also requires plans to maintain claims and appeals procedures. Department of Labor ERISA overview

Employees should save the SBC, SPD, SMM, enrollment confirmation and related communications. These records can become important when a coverage or claims dispute arises.

A simple way to compare total financial exposure

For each plan, calculate three figures:

1. Fixed annual cost: Total employee premium contributions for the year.
2. Expected annual cost: Premium contributions plus anticipated spending on visits, prescriptions and planned care.
3. High-use exposure: Annual premium contributions plus the in-network out-of-pocket maximum.

This method will not predict the exact cost of care. It creates a consistent comparison across plans and helps prevent a low premium from hiding a high deductible or weak network.

Also consider the cash-flow problem. A household may be able to afford a higher annual premium spread across 12 months but struggle to pay a $3,000 deductible early in the year.

What small businesses should review before finalizing benefits

Small employers face the same cost pressure with fewer employees over whom to spread risk. A significant renewal increase can force difficult decisions about contributions and plan design.

Before making changes, a small business should ask its broker or benefits adviser to provide:

• A year-over-year comparison of employer and employee costs
• A benefit comparison showing every material plan change
• Network-disruption information
• Prescription-formulary changes
• Employee-only and dependent contribution scenarios
• Alternative plan designs using the same contribution budget
• An explanation of administrative and compliance responsibilities
• Final SBCs and other required plan documents
• A clear employee communication schedule

Employers should also test how the proposed change affects different workers. A plan that appears reasonable for a healthy employee may create serious financial or access problems for a worker managing diabetes, cancer, pregnancy, behavioral-health needs or a child’s complex condition.

That review does not require an employer to eliminate every tradeoff. It helps leadership understand the consequences before employees experience them.

What benefits advisers should make visible

A useful renewal presentation should explain more than the percentage increase.

Employees and employers need to see:

• Who pays each portion of the increase
• Which benefits changed
• Which providers or facilities may leave the network
• Which medications face new restrictions
• How expected and high-use costs compare
• What employees must do before the enrollment deadline
• Where employees can obtain accurate, confidential help

Clear comparisons improve decision-making and reduce avoidable disputes after the plan year begins.

The decision to make during open enrollment

A 6% rise in employer health-benefit costs does not tell an employee exactly what next year’s coverage will cost. It does indicate that employers are working within a tighter financial constraint.

The safest response is to compare the entire plan: payroll contributions, deductibles, cost sharing, provider access, prescription rules and maximum financial exposure. Employees should complete that review before allowing an existing election to renew automatically.

Small businesses and benefits advisers have a related responsibility. Material changes should be identified plainly, documented correctly and communicated early enough for workers to make an informed choice.