Employer healthcare costs keep rising, but the best chance to make a difference begins long before any claim is filed.

Key Takeaways

• The average employer healthcare costs runs about $27,000 for family coverage, with workers paying $6,850 toward premiums out of their paycheck.

• Forecasts put the 2027 health cost trend near 9%, the steepest in 17 years.

• Cost shifting changes who pays the bill, while earlier activation can reduce avoidable costs by helping employees address health risks before they become expensive claims.

For many organizations, simply being 'average' now means facing a significant and potentially detrimental financial burden.

In 2025, the average annual premium for employer-sponsored family coverage reached $26,993, with employers contributing an average of $20,143. KFF reports that employees paid the remaining $6,850 through payroll deductions.

The outlook is not getting better. PwC projects a 9% medical cost trend for 2027, the highest in 17 years. At that rate, costs double in about eight years.

These numbers matter, but an average is just a starting point, not a plan. It shows what employers are spending, but it does not explain which costs could be avoided, which risks are quietly growing among your employee population, or where early action could change future outcomes.

Averages can hide the real stories. Costs can still be changed if we act early.

Take Maria, a 47-year-old team member whose bloodwork comes back borderline. She is busy, feels okay, and does not get a clear next step. The result sits in a portal. The email gets lost. She puts it off, hoping to deal with it later.

Two years later, that borderline result has turned into a diagnosis, a prescription, and ongoing claims.

The real cost did not start with the claim. It began in all those quiet months before, when a little guidance, preventive care, or a simple next step could have changed Maria’s path.

This is where the usual cost conversations fall short. They start after the money is spent, focusing on premiums and claims, while missing the daily choices employees make long before they become high-cost cases.

Not every healthcare cost has the same solution.

Healthcare inflation is being driven by powerful market forces, including provider consolidation, rising reimbursement rates, specialty pharmacy, GLP-1 utilization, behavioral health needs, and AI-enabled billing. Employers still need strong plan design, carrier and PBM oversight, payment accuracy, high-value provider strategies, and effective network management.

But that addresses only one side of the cost equation.

Avoidable costs also grow when preventive care is delayed, health risks go unmanaged, benefits remain fragmented, or employees do not know what to do next. These are not simply pricing problems. They are activation problems.

Shifting costs through higher contributions, deductibles, or tighter coverage may change who pays the bill, but it does not necessarily change the total cost. In some cases, it can cause employees to delay the very care that could prevent more serious and expensive health needs later.

A stronger strategy must do both: manage the cost of care and help employees act early enough to change what happens next.

Most employers already offer many of the resources their employees need. The challenge is that those resources - from high-quality provider reimbursement lookup tool to diabetes management to MSK pain treatment - all require an activated employee ready to use your benefits. Access exists. Activation is missing.

But if employers are going to invest in activation, they should expect more than another promise of engagement. They should expect measurable improvement and a partner willing to stand behind it.

If HR is accountable for outcomes, partners should be too.

HR and benefits leaders are expected to manage healthcare costs and workforce health, even though they do not control every factor influencing either one. Health plans, PBMs, providers, point solutions, and wellbeing partners all play a role. Yet when costs rise or outcomes fall short, leadership still turns to HR for answers.

Employers should expect more than another platform, participation report, or promise of engagement. HR should expect partners to define the outcomes they can influence, measure progress, and stand behind the results.

That is why Navigate introduced the Health Improvement Guarantee. For eligible employers, 30% of recurring subscription fees are at risk over 36 months. Our commitment is tied to a clear outcome: 80% of engaged participants improve at least one biometric between screening periods.

The guarantee does not suggest that Navigate can control every healthcare cost. It holds us accountable for what workforce health activation should accomplish: helping people take meaningful action and measurably improve their health.

What workforce health activation looks like

Workforce health activation is how we turn that accountability into action. Navigate brings together culture, care, and clinical wellbeing so health and benefits investments work as one connected experience:

• Culture creates trust and relevance. Employees are more likely to engage when the experience reflects their organization, work environment, and daily realities.

• Care turns information into a next step. Personalized guidance considers an employee’s needs, interests, health data, and readiness to change instead of sending everyone the same message.

• Clinical wellbeing connects action to measurable improvement. Evidence-based programs, pharmacist-led coaching, biometrics, claims insights, and health risk data help people address what is affecting their health.

This approach is supported by client success tailored to each industry, because activating a manufacturing workforce requires a different strategy than engaging hospital employees or professional services teams.

For Maria, activation means more than displaying a borderline result. It means helping her understand what it means, showing her what care is due, and giving her a clear next step before that risk becomes a diagnosis or an expensive claim.

Navigate’s Health Dashboard brings preventive care and chronic condition recommendations into one connected experience. Employees can see what care is due, why it matters, and what to do next. Personalized tracking, educational resources, automated reminders, and wellbeing incentives make it easier to follow through on recommended care.

For employees managing an existing condition, the Health Dashboard can also surface ongoing care recommendations, helping them close gaps, stay on track with their care plan, and reduce the risk of avoidable complications. Employers gain visibility into preventive care gaps, engagement patterns, and population health risks. This makes it possible to identify where intervention is needed, deliver more targeted outreach, and measure whether employees are taking the actions that can influence long-term health and cost.

The goal is not simply to tell Maria she may be at risk. It is to help her act while the outcome can still change.

Explore the Health Dashboard - take an interactive tour.

Helping employees take action is only the first step. Employers also need to know whether that action is leading to better health.

Accountability requires measuring health improvement.

Engagement matters, but logins, clicks, and completed wellbeing challenges are not the ultimate goal. They are indicators that people are taking steps forward. The real question is where those steps lead.

A meaningful measurement model connects three levels of evidence:

• Activation: Are people engaging with relevant resources and taking meaningful next steps?

• Health improvement: Are biometric risk, stress, weight, preventive care, and other health indicators improving?

• Business impact: Are those improvements contributing to lower avoidable utilization, a healthier workforce, and greater value from existing benefits?

Navigate’s results show what this progression can look like. Across our 2025 book of business:

• 35% of high-risk participants lowered their risk level within one year

• 30% improved stress and mental wellbeing

• 18% achieved more than 5% body weight improvement

These are more than participation metrics. They show that when employees receive relevant support at the right moment, they can change their health trajectory.

For HR and benefits leaders, that creates a stronger story for the CFO. Instead of defending logins or relying on projected ROI, they can demonstrate measurable health improvement, connect those outcomes to business impact, and show that their partner is accountable for delivering results.

Five pivotal questions to ask before your next renewal

A 9% medical cost trend should create urgency, but not panic. Before defaulting to another round of cost shifting, ask:

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 coordinate everything themselves?

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

4. Can we measure health improvement and risk reduction, not just participation?

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

The opportunity begins before the claim

Employers cannot prevent every high-cost claim or control every force driving healthcare prices. But those forces are not the whole story.

There is still an opportunity in the months and years before a claim appears: the missed screening, the borderline result, the unmanaged stress, the unused benefit, or the employee who wants to improve but does not know where to begin.

A claim is where the cost appears. Activation is where the outcome can still change.

Employers are already being held accountable for workforce health and healthcare costs. It is time their partners shared that responsibility.

You are accountable for your people’s health. So are we.

Let’s identify the health risks, activation gaps, and measurable opportunities within your workforce strategy. Request a demo to see whether your organization qualifies for Navigate’s Health Improvement Guarantee.

FAQs

What can employers do to reduce rising healthcare costs?

Employers can focus on improving primary care access, steering employees toward high-quality care, increasing preventive care participation, and helping people use the benefits already available to them. The goal is to address health risks earlier and reduce avoidable high-cost care.

Do employee wellbeing programs reduce healthcare costs?

They can, but participation alone is not enough. Effective wellbeing programs use workforce health data to identify risks, personalize support, and guide employees toward actions that improve health. Employers should evaluate measurable health improvement, not just enrollment or engagement.

Why do employee benefits and point solutions go underused?

Employees often face too many disconnected resources and do not know which benefit is right for their needs. Personalized guidance can connect each employee to the most relevant care, benefit, or next step, increasing utilization without requiring HR to manage another standalone program.

How can employers measure whether their health strategy is working?

Employers need reporting that connects participation with health risks, preventive care gaps, biometric improvement, benefit utilization, and potential cost impact. Navigate’s Health Dashboard brings these insights together so HR teams can see where action is needed and demonstrate the value of their strategy.