For many employers, the annual healthcare renewal process has followed the same pattern for decades.
Review the increase.
Negotiate with the insurance carrier or move to a different carrier.
Adjust plan designs.
Increase deductibles or employee contributions.
Then repeat the same process the following year.
The challenge is that these strategies often manage the result of healthcare spending instead of addressing what is actually driving the cost.
Over the past year, I have been working with an employer facing this exact challenge.
The organization had 76 employees enrolled in their health plan and was facing a 22% renewal increase.
The issue was not simply the renewal.
The bigger challenge was understanding why costs were increasing and how the plan was structured.
After reviewing the employee population, one opportunity became clear. Many healthier employees were not participating in the health plan because the cost did not make financial sense for them.
Instead of only increasing deductibles or shifting more costs to employees, we changed the strategy.
The employer created a more affordable plan option by reducing the employee contribution for individual coverage, making healthcare more accessible for employees who previously declined participation.
The result?
Enrollment increased from approximately 75 employees to 100 employees, increasing participation by more than 30% and creating a stronger overall risk pool.
One year later, instead of facing another significant increase, the renewal is projected to be close to flat.
Equally important, because the plan performed better than expected, the employer was able to build a claims funding reserve from unused healthcare dollars.
Instead of those dollars disappearing at the end of the year, they remain available to help manage future healthcare costs and support employees and families when larger claims occur.
That is the difference between simply purchasing health insurance and building a long-term healthcare strategy.
We are in the middle of a healthcare renaissance, and employers are beginning to recognize that controlling healthcare costs requires looking beyond the renewal.
The employers gaining more control today are asking three different questions.
Are we managing how our healthcare plan is funded?
One of the biggest misconceptions in healthcare is that alternative funding strategies, such as partially self-funded health plans, automatically mean taking on unlimited risk.
Many employers believe the only options are staying with a traditional fully insured plan or taking on all the risk themselves.
That is not the case.
Healthcare funding is not an all-or-nothing decision.
Employers can transition through different funding strategies designed around their size, risk tolerance, and long-term goals.
The objective is creating a structure that provides more transparency, accountability, and control.
A properly designed funding strategy helps employers understand where healthcare dollars are going, how risk is being managed, and what happens when the plan performs better than expected.
Are employees able to afford and use the healthcare plan being offered?
Healthcare affordability is about more than the employee contribution coming out of a paycheck.
Many employees choose their plan based on monthly cost.
But the bigger question is:
Can employees afford to use their healthcare when they actually need it?
A plan with high deductibles, confusing access points, and unexpected bills may technically provide coverage while still creating financial barriers.
The goal should not only be providing insurance.
The goal should be helping employees access healthcare.
A successful strategy recognizes that every employee population is different.
Healthy employees need affordable options that keep them participating.
Employees managing medical conditions need access to quality care without unnecessary obstacles.
When the plan works better for employees, it creates better outcomes for the organization.
Are employees receiving guidance before expensive healthcare decisions are made?
Providing an insurance card is not the same as helping someone navigate healthcare.
Employees are often expected to make important medical and financial decisions without knowing:
Where should I go?
What will it cost?
Is there a better option?
Healthcare remains one of the few industries where people routinely make major financial decisions before understanding the cost.
For employers, the opportunity exists before the claim occurs.
Helping employees find the right care, at the right place, at the right time can improve the employee experience while creating a more efficient healthcare strategy.
Healthcare costs will continue to rise.
But accepting uncontrolled increases every year does not have to be the only option.
The employers building sustainable healthcare strategies are no longer just negotiating renewals.
They are understanding how their plans are funded, designing benefits employees can actually use, and helping employees make better healthcare decisions before costs occur.
Healthcare is no longer only about managing premiums.
It is about managing risk, improving access, and creating a strategy that supports both the organization and the employees who rely on it.
The question is not whether healthcare costs will continue to rise. It is whether your strategy is designed to manage them.
About Ken Wosczyna
Ken Wosczyna of EBA-1 is a healthcare strategist specializing in employer-sponsored health plans, utilization analytics, and sustainable cost control. Based in Stamford, Connecticut, he helps employers develop long-term healthcare strategies that improve affordability for employees while creating more predictable healthcare spending for businesses. Through data-driven analysis and multi-year planning, Ken works with organizations to reduce overspending and build sustainable health plans that better serve both employers and their workforce.
For additional perspectives on employer healthcare strategy, cost management, and industry trends, visit https://eba-1.com/ or subscribe to Ken’s LinkedIn newsletter, K.I.S.S. Healthcare 101 — Keep It Simple & Smart, Monthly Health Insurance at https://www.linkedin.com/build-relation/newsletter-follow?entityUrn=7249889392675155968
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