Healthcare costs are the most important issue in the United States, and 2025 is expected to be the most expensive year for employer-sponsored insurance. According to SHRM, employers’ health plan costs are expected to face an increase of 8 to 9%. The previous employer’s $10,000 per member plan will now cost $10,800. For employees, this means that according to KFF data, it shows that the average individual employee contribution in 2024 is $1,368.
Think of it this way: Now, the annual salary of an average employee for nearly five weeks is under medical coverage, before a doctor’s visit or prescription. Despite the high cost, many employers and employees do not see corresponding improvements in the quality of care. According to a survey by the National Health Business Group, more than 40% of employers are considering changing their health insurance companies over the next two years.
At CBIZ, I directly and indirectly support over 1,000 employers to help them navigate the complexities of today’s healthcare environment. One question I often hear is: “I know health care is expensive, but Why Is it so expensive? “This is how I usually react and how to help businesses take action.
Brokers and Advisors: Understand the differences and choose the right partner
Although employers provide health care to employees, managing a health plan is not their primary expertise. This is why external support is crucial. When looking for an outside consultant, there are two different prototypes: broker and consultant.
Wikipedia defines a broker as an intermediary that sells, recruits or negotiates insurance on behalf of a client. Instead, a consultant is defined as a consultant who helps individuals and businesses understand and select appropriate policies, providing guidance on risk assessment, claim management, compliance, and more. Advisors tend to provide ongoing support beyond the initial policy purchase.
Brokers focus on identifying and recommending the right insurance products and plans. This product-centric blanket approach is perfect for small businesses looking for a simplified, direct approach, but for organizations facing complex costs and welfare challenges, consultants offer a higher level of strategic insight.
Consultants go beyond the product. Before recommending the path forward, they delve into the business to gain insight into the unique challenges and issues of their customers. The consultant evaluates the use of claim data, contract language, risk tolerance, etc. – Then They offer tailor-made solutions designed to meet the unique needs of their customers. Many consultants call themselves consultants, but few truly embody this kind of consulting mentality.
Understand what distinguishes the advisor from the broker, not just semantics, but the difference between updating an existing strategy and completely rethinking it. Ultimately, employers should look for an external consultant whose mission is to improve and enrich employee health plans No Increase deductible or out-of-pocket expenses for members.
Management Cost: A Strategic Approach
As a consultant, I see my role as a boxer. Managing a health plan is like stepping into a 12-round championship battle. It’s not only about the power of brute force, it’s also about timing, strategy and staying agile. Top employers know when to poke (negotiate fees), when to avoid (avoid network bloat), and when to strike with bold new plans.
Including welfare costs requires punching and counter-strike methods. Employers who wait to adapt, year after year, stick to the same strategy often miss their opportunity to mitigate costs. Why? Because at the time of implementation, the industry has offset their cost control strategies.
To ensure effective cost reductions, employers can’t wait to adjust the market – they have to punch holes first. My most successful clients are those who act boldly and embrace innovation.
Bleeding Edge Innovation with Breaking Edge
When I met with clients, I explained two aspects of medical innovation: the bleeding edge and the rupture edge. On the brink of bleeding, the risk usually outweighs the reward. But the edge of breaking is where innovation and data work together to produce reliable results.
Leading alternative health plans incorporate cost control strategies that can help employers actively manage year-on-year growth. Although many of these strategies are considered to be the brink of bleeding 10 years ago, their effectiveness is now proven nationwide. Great consultants will provide meaningful businesses with disruptive solutions such as alternative health plans.
Employers who leverage these broken solutions can ultimately make wise moves forward The cost spiral is out of control.
Utilize the power of data
While innovation is critical to reducing costs and addressing other critical healthcare challenges, it must be supported by data to be truly effective.
Through data and myriad planned analyses, our team has determined that the data should be divided into three key levels: actionable, impactable and observable. Many consultants focus only on data in aggregate form, which usually only fills the “observable” buckets, while the other two are empty. When working with clients, I go beyond the surface and mine to member-level data, populating each critical bucket. This allows me to have a holistic understanding of the current strategies of my clients and provide data-driven advice centered on their goals, whether they are working to maintain employee premiums, reduce deductibles, or manage their overall spending.
Strategic data analysis pairs with innovation drive measurable, influential results.
The way forward
Effectively managing health care costs requires not only decisions about renewing seasons, but also a thoughtful strategy rooted in adaptive data and aligned with real-world outcomes. By embracing proven innovation and working with consultants who serve as real partners, organizations can control costs while increasing employee satisfaction and improving program performance.
To learn more about leveraging data to drive health plan decisions, visit: CBIZ data-driven cost control.
Cole Harris serves as President of Welfare and Insurance, Tennessee, and a national practice leader in CBIZ Health Innovation Practice. With extensive welfare and insurance industry experience, Cole plays an integral role in major corporate strategies, providing consulting services including evaluating current practices and recommending comprehensive, data-driven solutions. His expertise covers a wide range of areas including healthcare reform, compliance standards, pharmacy welfare management, value-based purchases, welfare design and more.
