About 165 million Americans get their health insurance through work, yet most don't spend much time thinking about what benefits their employer offers and what it will cost.
In fact, employees spend only about 45 minutes a year, on average, selecting the benefits options that work best for them, according to a report from Aon.
The open enrollment season, which usually lasts until early December, is an opportunity to get a closer look at what's at stake.
For starters, costs are rising.
Costs are rising
The cost of health care has been rising steadily for many years. Recently, there has been a noticeable jump.
For employers, these cost increases are at a post-pandemic high, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers expect health care costs to rise by 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023, the company said.
Because of rising costs, employers are considering new ways to modify their plan offerings, WTW found.
To that point, 52% of companies said they plan to implement programs that will reduce overall costs, and many also intend to turn to less expensive providers and sites of care, which could mean a narrower network of doctors to choose from.
Currently, employers subsidize about 81% of health plan costs, on average, while employees pay the rest, according to professional services firm Aon.
However, some of the higher costs will inevitably be passed on to employees.
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The WTW report found that nearly a third of employers, or 34%, expect to shift some expenses to employees through higher premiums or by increasing copayments on high-deductible health plans in the next year.
The cost per employee is expected to jump by 5.8% on average in 2025, marking the third straight year that health benefits costs have exceeded 5%, after a decade in which they averaged only about 3%, according to a separate report from Mercer Consulting Company.
“These are the changes that employees will feel,” said Beth Umland, director of health and benefits research at Mercer.
For workers, health care expenses are already high: Family premiums for employer-sponsored health insurance rose 7% this year to an average of $25,572, according to the 2024 KFF Employer Health Survey. Workers are responsible for more than $6,200 of this amount, while employers bear the remainder.
“With cost increases reaching a post-pandemic high, companies are concerned about the burden they are placing on their workforce, especially as it impacts decisions about insurance coverage and care,” Tim Stawicki, chief actuary for health and benefits at WTW, said in a statement. .
Consider your health care expenses
Employees are often offered options for choosing a medical insurance plan: one with a higher monthly cost, known as your premium, a lower deductible, which is the amount you will have to pay before your employer plan kicks in, and another option with higher out-of-pocket costs but lower premiums. less.
“Most of the time, when you go through open enrollment, the first thing you see are deductible costs and out-of-pocket costs,” said Regina Ehrke, WTW North America health, equity and well-being officer.
When weighing options, use previous years as a guide, advises Gary Kushner, president and president of Kushner & Company, a benefits design and management firm.
He said you should consider: “Am I from a family with low, medium or high claims? Have I had an accident that requires acute care or a lot of preventative care?”
If you typically only go to the doctor, say, once a year for a checkup, you may want to choose a so-called high-deductible plan for a lower monthly cost.
Health savings accounts
Besides a high-deductible health insurance plan, more than 50% of employers also offer a health savings account, or HSA, which can help cover additional health care costs.
To be able to use an HSA, you must have a qualified high-deductible health plan. The IRS defines a “high deductible” as at least $1,650 for self-only plans or $3,300 for family coverage for 2025.
The IRS also sets the maximum contribution allowed each year: The new HSA contribution limit for 2025 will be $4,300 for individuals, up from $4,150 in 2024, and $8,550 for families, up from $8,300 in 2024. 55 or older Make an additional $1,000 catch-up contribution at the IRS annual limits.
HSA contributions then grow on a tax-advantaged basis, and the money can cover out-of-pocket expenses, including doctor visits and prescription medications, including expensive weight-loss drugs.
As costs continue to rise, HSAs are a key safety net for managing these out-of-pocket expenses, WTW's Ihrke said. Any money you don't use can be rolled over from year to year.
“Make sure you think about how you can put some money into that savings account so you can use it to pay your doctor bill or save it for future years,” Erke explained.
Life and disability insurance
During open enrollment, employees may also be offered various disability and life insurance options, which are often included in the standard benefits package.
Employer-issued life insurance policies usually amount to a year's salary. You can purchase additional life insurance through your employer. This is called supplemental life insurance, or voluntary life insurance, and is optional coverage you can add to your employer's basic group policy.
In disability insurance, there are two basic types: Short-term disability generally replaces 60% to 70% of your base salary and your employer often pays the premiums. Long-term disability, which typically begins after three to six months, typically replaces 40% to 60% of your income.
Even if you have these policies through work, it may be a small fraction of what you need to protect young children or other dependents.
Think about what amount is right for you and your family, then consider whether you want to purchase additional coverage, or supplemental insurance, through your workplace group plan or shop for your own policy, a step many advisors recommend.
Take advantage of volunteer benefits
Additional benefits may be optional but they are no less important these days, especially when it comes to luxury. When open enrollment begins, nearly 1 in 5 employees report deteriorating mental health, according to a recent report from Gallagher.
“More than ever, we're seeing employers looking to meet the growing needs in their workforce, and today's employees are looking for more comprehensive well-being support,” said Tom Kelly, director of Gallagher's health and benefits practice.