03/19/2026
“Employer-sponsored health insurance is now a volatile, high-cost input”
https://www.directorsandboards.com/board-duties/strategic-oversight/health-care-oversight-belongs-in-the-boardroom/
“Health insurance is now the second largest employee expense after salaries for most businesses, and the “WTW 2025 Best Practices in Healthcare” survey shows that employer health insurance premiums will increase by an average of 9.1% in 2026. This describes only a portion of the pain employers are feeling due to health care costs. Over one half of companies (51%) reported they were significantly over budget in 2024, with health care costs on average 4.5% above budget. Many employers will see double-digit annual increases in their health care costs over the next three years.
“A family health insurance plan in the U.S. now costs an average of $26,993, of which employers generally pay about 80%. The employee share of health insurance premiums is about $6,850. Aggregated deductibles have risen to $5,092, so many employees feel burdened by higher premiums for health plans they feel provide them with little coverage. Increasing employer health insurance costs have crowded out other compensation spending, leading to lower employee earnings, decreased contributions to retirement plans and decreased offering of retiree health plans.
“The Centers for Medicare and Medicaid Services Office of the Actuary estimates that private health insurance will cost about $1.2 trillion dollars in 2026 and is on track to cost $2.2 trillion in 2032. Yet, employers are not likely to stop offering health insurance. Eight of nine employers (88%) report they believe they will still be offering employer-sponsored health insurance in a decade, and over one third of employees (36%) report their health benefit is a top reason why they stay at their current jobs.”
Employer-sponsored health insurance is now a volatile, high-cost input that demands the same rigor and oversight boards apply to any strategic expense.
