Employer healthcare costs are rising. Here’s what HR can do.

The most expensive benefits decision is the one you save for later.

Summary

Healthcare costs may feel as inevitable as the weather, but employers can still influence what happens before a health risk becomes a claim. Employer healthcare costs continue to rise, with family coverage nearing $27,000 annually and medical cost trends projected to increase another 9% in 2027. While employers can't control every cost driver, they can influence whether employees understand, access, and use the benefits they've already invested in. Helping people take action earlier through preventive care, primary care, and personalized guidance can improve health outcomes before they become costly claims.

In This Article

• Why rising healthcare costs tell only part of the story

• The difference between managing healthcare costs and activating employees

• Why the biggest opportunity exists before the claim

• How Workforce Health Activation helps employees take the right next step

• Questions to ask before your next renewal

Employer healthcare costs are rising - here’s what HR can do

Healthcare costs have become like the weather. 

Every year, the forecast arrives. Costs are expected to rise. Premiums increase. HR leaders prepare budgets, evaluate plan designs, negotiate with carriers, and hope next year looks a little better than the last.

Some healthcare cost drivers are outside an employer’s control. Provider consolidation, specialty drugs, inflation, and labor shortages continue to reshape the market.

But focusing only on those forces misses another part of the story.

Many of tomorrow's healthcare costs begin long before a claim is ever submitted.

A missed preventive screening. An unmanaged health risk. An employee who doesn't know what to do next. A benefit that never gets used.

Like compound interest, these small moments accumulate over time. The difference is that instead of growing savings, they grow health risks, delayed care, and future claims.

The opportunity isn't simply managing healthcare costs after they appear. It's changing what happens before. 

Rising employer healthcare costs tell only part of the story

According to KFF, the average annual premium for employer-sponsored family coverage neared $27,000 in 2025, with employers contributing approximately $20,143 and employees paying the remaining $6,850 out of their paychecks.

The outlook isn't improving.

Employer healthcare costs will rise nearly 9.5% in 2027 according to an AON projection, while PwC forecasts medical cost trends around 9%—the steepest increase in nearly two decades.

Those numbers matter. But they don’t explain which claims could have been prevented or where employees needed support before their health became more complex and more expensive.

The forecast tells employers what they’re spending. It doesn’t tell them what they can still influence.

The difference between managing healthcare costs and activating the people using healthcare benefits

Not every healthcare cost has the same solution.

Brokers and employers work together to manage health plans, carrier relationships, provider networks, pharmacy strategies, and healthcare spending. Those efforts are essential. But they address only one side of the equation.

The other side develops quietly as employees delay preventive care, struggle to navigate benefits, or never connect with the right resource at the right time.

That’s not a pricing problem. It’s an activation problem.

The hidden cost isn’t the claim.

Meet Alex. She is 47 years old, and her annual screening identifies an elevated health risk. She feels fine. She receives an email she’ll read later. Nothing feels urgent.

Two years later, she’s managing a chronic condition requiring medications, specialist visits, and ongoing care.

The claim didn’t create the problem. It revealed it.

The greatest opportunity existed much earlier, when personalized guidance and a clear next step could have changed the outcome. 

Claims rarely appear overnight. They’re often the result of dozens of small moments when employees needed support but never received it. The most expensive benefits decision is the one you save for later.

Most employers don't need more benefits, they need activation

Today’s employers already provide preventive care, behavioral health, care navigation, condition management, virtual care, financial wellbeing, and coaching. The challenge isn’t a lack of resources. It’s helping employees understand what they have, when to use it, and what to do next.

That’s why HR leaders are asking a different question today.

Not: “What benefit should we add?”

But: “How do we help employees use what we’ve already invested in?”

At Navigate, we call this Workforce Health Activation. Rather than treating culture, benefits, wellbeing, and clinical support as separate initiatives, Workforce Health Activation connects them into one experience that helps employees take action before health risks become high-cost claims.

Navigate’s Health Dashboard brings preventive care recommendations, condition-specific guidance, and existing benefits together in one personalized experience. Employees know what to do next while employers gain visibility into health risks before they become claims.

See how Navigate connects culture, care, and clinical wellbeing into one experience. Take the interactive platform tour.

Measure what actually changes health

Engagement matters, but it’s only the beginning. The real question is whether employees improve their health.

Across Navigate’s book of business, 35% of high-risk participants lowered their health risk within one year, demonstrating that activation can lead to measurable health improvement rather than simply higher participation.

Because employers are increasingly accountable for workforce health, Navigate introduced the Health Improvement Guarantee, putting 30% of subscription fees at risk based on measurable health improvement for eligible organizations.

5 questions to ask before your next renewal

Before your next renewal, work with your broker to answer five questions and identify where your greatest opportunity for activation exists.

1. Where are employees delaying preventive care or failing to act on identified risks?

2. Are our benefits connected through one experience, or are employees expected to navigate them independently?

3. Can we personalize the next step using health data, individual needs, and readiness to change?

4. Are we measuring meaningful health improvement or simply participation?

5. Which partners are willing to share accountability for the outcomes they influence?

Healthcare costs will continue to rise. But waiting limits what employers can still influence. The opportunity exists before tomorrow’s claims are created, while employees can still take action and outcomes can still change.

Manage the healthcare system. Activate the people using it.

See what Navigate's culture, care, and clinical framework looks like for your workforce activation strategy by requesting a demo.

Frequently asked questions

How can employers reduce healthcare costs without cutting benefits?

Employers can't control every healthcare cost driver, but they can influence how employees use the benefits they already provide. Increasing participation in preventive care, primary care, and personalized guidance can help employees address health risks earlier, improving outcomes before they become costly claims.

What is Workforce Health Activation?

Workforce Health Activation is a strategy that helps employees understand, access, and use their health benefits at the right time. It connects culture, care, and clinical support into one experience that encourages earlier action, improves health outcomes, and increases the value of existing healthcare investments.

Why do employer health benefits often go unused?

Most employers already offer valuable health resources, but employees often don't know what benefits they have, when to use them, or which resource is right for their situation. Personalized guidance and connected experiences help employees take the next best step instead of navigating disconnected benefits on their own.

What's the difference between managing healthcare costs and activating employees?

Managing healthcare costs focuses on health plans, carrier strategies, provider networks, and pharmacy costs. Activating employees focuses on helping people take preventive action, engage with primary care, use available benefits, and address health risks before they become expensive claims. Organizations need both to improve workforce health and maximize the value of their healthcare investment.