Experts predict health care and insurance costs will keep going up in 2026. Employers are bracing for a median increase of 9%. Why? A few key reasons: the rising use of expensive drugs like GLP-1s, higher hospital costs, and growing demand for mental health services.

The good news is employers have options to help manage these rising costs.

1: Focus on Preventive Care: Encourage employees to use the preventive care benefits included in your group health plan. If your plan meets Affordable Care Act standards, it covers nearly 20 preventive care benefits. These include blood pressure, cholesterol, diabetes, cancer, and obesity screenings. Also included is counseling for diet, weight management, and tobacco or alcohol use. Preventive care can help catch health issues early, lowering long-term costs.

2: Encourage Use of Generic Medications: Generics usually cost much less than brand-name drugs. In fact, about nine of 10 prescriptions in the U.S. can be filled with generics. Once patents expire, multiple companies can make the same medication, driving costs down while still meeting FDA standards.

3: Offer HDHPs with HSAs: High-Deductible Health Plans (HDHPs) continue to grow in popularity. More than half of U.S. private-sector workers enrolled in one in 2021. HDHPs typically come with lower monthly premiums, and when paired with a Health Savings Account (HSA), employees also get:

• Tax-deductible contributions
• Tax-free growth on interest or investments
• Tax-free withdrawals for qualified expenses

Unlike Flexible Spending Accounts, HSA funds roll over year to year, so employees don’t lose unused money.

4: Improve Price Transparency: Many employees don’t realize that federal law now requires hospitals to post detailed pricing information online. This includes negotiated rates and costs for 300+ services — like X-rays, lab work, outpatient visits, colonoscopies, and more. Making employees aware of these tools can help them make smarter, more cost-effective choices.

5: Expand Telehealth & Disease Management: Telehealth offers lower-cost, more convenient access to care. It also helps employees see specialists sooner. Employers can also reduce costs by supporting disease management programs for conditions like diabetes, asthma, and hypertension. These programs focus on lifestyle changes, education, and care coordination, leading to better health and lower expenses.

6: Simplify Employee Education: When employees understand their benefits, they make better decisions. Use plain language, visuals, webinars, and online portals to explain coverage. This not only helps employees get the most from their benefits but also builds a stronger culture of health.

7: Work with a Broker: A broker can help you stretch your benefit dollars without adding costs. They’re paid by the insurance companies, not by you. Brokers know the networks, pricing, and plan options available, so they can match you with the right coverage at the right price.

Explore Your Options

Ask your broker for a personalized quote. If you’re not already working with one, we make it easy to search for one.

With CaliforniaChoice, you can:

• Offer employees 7 health plans and 100+ coverage options statewide

• Control your costs while expanding employee choice

• Add extras like Dental, Vision, Chiropractic & Acupuncture, Life, and AD&D