Most employers shop the market every year and still end up in the same place. That’s not a coincidence. When the underlying plan structure never changes, neither do the results.
The email from your broker probably sounded familiar. Another year, another renewal notice, another increase. You’ll get three or four quotes, maybe change carriers, maybe raise the deductible a little, maybe pass more cost onto employees. Next year, the email will arrive again. And the year after that.
If this pattern feels stuck, it’s because the conversation you’re having every year is the wrong conversation.
The Numbers Tell the Story
According to the Kaiser Family Foundation’s (KFF) 2025 Employer Health Benefits Survey, the average annual premium for family coverage reached $26,993 in 2025, a 6% increase over the previous year. Single coverage averaged $9,325, up 5%. Over the past five years, family premiums have risen 26%.
Next year is worse. Four of the largest benefits consulting and research organizations in the country are projecting the same direction for 2026. Aon projects employer healthcare costs will rise 9.5%, exceeding $17,000 per employee. Mercer projects a 6.7% average increase that pushes costs above $18,500 per employee, the largest jump since 2010. The International Foundation of Employee Benefit Plans puts the 2026 increase at 10%. WTW, a global benefits consultancy, projects US healthcare costs will rise 9.6%.
The direction is clear. What’s less clear is what employers are supposed to do about it, because the standard playbook isn’t working.
Every year the market shop produces the same three or four quotes, the same kind of plan, and the same basic math. You save a little on premium, lose a little on coverage, and wait to do it again next September.
Why Shopping the Market Keeps Producing the Same Results
The standard broker conversation centers on price. Which carrier has the lowest rate this year? Which network is cheapest? Can we shift more to the employees? These questions make it feel like you’re solving the problem, but you’re really just redistributing it.
The underlying plan design, meaning the deductible structure, how care is accessed, what gets covered first, who absorbs the financial risk before coverage begins, rarely changes. A high-deductible PPO at Carrier A is structurally the same product as a high-deductible PPO at Carrier B. Switching carriers changes the price tag. It doesn’t change what your employees experience when they actually need care.
And what they experience is increasingly that they can’t use the benefit you’re paying for.
The Real Problem: Employees Can’t Afford to Use the Plan
In a 2025 Pollfish survey of 2,500 American adults, 38% said they skipped or postponed necessary healthcare or medications in the past 12 months because of cost. That was up from 27% in 2023, a 41% jump in two years. Of those who delayed care, 42% said their medical condition worsened as a result.
These aren’t uninsured people. Eighty percent of the respondents had employer-sponsored coverage. They’re paying for benefits they can’t use.
The Aflac WorkForces Report found that 44% of employees couldn’t pay $1,000 in out-of-pocket healthcare costs, and 19% couldn’t cover $500. Yet 78% of employers surveyed believed their employees could meet those costs. KFF reports that more than one-third of covered workers are enrolled in a plan with a deductible of $2,000 or more for single coverage. For employees at small firms (under 200 workers), the average deductible is $2,631.
If an employee doesn’t have $1,000 in savings and your plan requires them to spend $2,500 before coverage kicks in, the plan is technically there. Functionally, it isn’t.
What a Design Problem Actually Looks Like
A design problem is when the architecture of a thing produces outcomes its buyers didn’t want. You can optimize every part of a design that doesn’t work and still end up with something that doesn’t work.
The traditional employer health plan was designed in and for a different era. It assumed stable, salaried, single-site employment with predictable wages sufficient to absorb meaningful cost-sharing. That workforce still exists in some industries, but it increasingly doesn’t exist in restaurants, healthcare, logistics, retail, manufacturing, construction, or any business that runs on hourly workers.
When you apply a salaried-corporate plan design to an hourly workforce, the result is predictable. Premiums feel expensive to the employer. Deductibles feel impossible to the employee. Participation drops because the plan isn’t worth enrolling in at the price point it’s offered. The employer pays for coverage many workers don’t use, and the workers who do enroll still can’t afford to access care. Everyone loses, and the next year the broker calls to shop the market again.
A plan with a $2,500 deductible is a different product than a plan with no deductible. One of them is something employees use. The other is something they’re afraid to use.
What Design-Driven Benefits Look Like Instead
Solving a design problem means changing the architecture, not negotiating with the version that doesn’t work.
For employers with hourly or frontline workforces, that often means moving away from the high-deductible PPO model entirely and toward plans that pay from the first visit. No-deductible health plans, fixed-copay structures, and plans that bundle primary and urgent care access into the premium all change the employee’s experience from “I can’t afford to use this” to “I can see a doctor today.”
For mixed workforces that include W-2 employees, 1099 contractors, and variable-hour workers, design-driven solutions often look like Individual Coverage HRAs (ICHRA) or hybrid approaches that fit different coverage options to different employee types rather than forcing everyone into the same plan.
None of these alternatives are new or exotic. They’re just not what gets offered in the typical renewal conversation, because the typical renewal conversation isn’t designed to find them.
The Questions Worth Asking Before Your Next Renewal
The next time your broker sends the renewal notice, the most useful conversation isn’t about carrier comparison. It’s about the design of what you’re buying.
- →What percentage of your workforce actually enrolled in the current plan?
- →Of those who enrolled, how many have hit their deductible and accessed care?
- →When employees have hourly wages and $500 in savings, what does your deductible actually mean to them?
- →Does your current plan drive retention, or is it just a line item?
- →If you showed your employees the plan design and asked them honestly whether it’s valuable, what would they say?
If the answers point to a plan that isn’t serving the workforce you actually have, shopping the market for a 5% discount on the same design won’t fix it. It will just give you a slightly cheaper version of the same problem.
Rising health insurance costs aren’t a pricing problem. They’re a design problem. Until the design changes, nothing else will.