July and August bring a familiar challenge for many employers: managing rising health insurance costs without reducing the benefits employees value.
ERC’s recent Health Insurance Renewal Strategies & Cost Management Member Poll suggests many organizations are beginning to look beyond traditional cost-shifting strategies and explore ways to influence healthcare costs before claims occur.
Renewals continue to put pressure on employers
The poll findings are clear. More than half of participating employers expect their upcoming renewal to be higher than in previous years, and nearly half anticipate increases above their normal trend.
But the real challenge goes beyond absorbing higher premiums. Employers are trying to balance financial realities with employees’ expectations for affordable, accessible coverage. That tension shows up in employers’ top priorities for 2027 renewals: reducing overall costs, improving employee education and engagement, and stabilizing long-term cost trends.
Which raises an important question: if healthcare costs keep rising year after year, what can employers do to address the root causes of that spending, rather than simply asking employees to carry more of the weight?
The connection between health outcomes and health costs
One answer may lie in prevention.
Tony Barisono, ERChealth Vice President, points out that many chronic diseases are tied to controllable risk factors.
“Smoking, poor nutrition, and physical inactivity can significantly increase the likelihood of someone developing one or more chronic conditions,” said Barisono.
Conditions like obesity, diabetes, hypertension, and cardiovascular disease also affect employee well-being and contribute significantly to healthcare spending. As GLP-1 medications continue to grow as a share of claims costs, the financial stakes around chronic condition management are only getting higher.
That connection between lifestyle risk factors and healthcare spending helps explain why more employers are turning to employee education, wellness, and preventive care as part of their long-term cost-management strategy.
Employers are prioritizing education and prevention
One of the more telling findings from ERC’s poll is that employers are not solely focused on plan design changes to address rising healthcare costs.
When asked which strategies they are considering, the most common response was increasing employee education around healthcare benefits and insurance usage. Employers also identified well-care initiatives and chronic condition prevention and management as key priorities.
Open-ended responses echoed these themes, highlighting wellness incentives, preventive care, telehealth utilization, and stronger engagement with primary care providers.
Taken together, the findings suggest organizations increasingly view employee health engagement not as a standalone wellness initiative, but as a business strategy that can influence future healthcare costs.
Why preventive care matters
Preventive care has long been recognized as a driver of better health outcomes, but its impact on employer healthcare spending is becoming harder to ignore.
As Shawn Heitner, ERChealth Program Manager, explains, “Encouraging members to engage proactively with their health can make a big difference and reduce the likelihood of them needing costly emergency room care down the line.”
Preventive care also supports earlier diagnosis and treatment, which can significantly reduce healthcare costs.
Research by the American Cancer Society highlights substantial cost differences based on the stage at which certain cancers are diagnosed and treated. For example, the mean cost savings for a stage one lung cancer diagnosis compared to a stage four diagnosis is $262,508 per case.
Employers responding to the poll reflected this same emphasis on prevention, citing wellness incentives, annual physical requirements, telehealth engagement programs, and initiatives designed to encourage more consistent primary care use.
A shift in how employers think about health benefits
Historically, employers responded to rising healthcare costs through plan design changes such as higher deductibles, adjusted copays, or alternative funding models.
While those strategies remain part of the conversation, ERC’s polling data points to a broader shift. Employers are increasingly focused on improving engagement and supporting healthier decision-making.
For organizations navigating another challenging renewal season, that shift represents an opportunity. Rather than viewing benefits solely as an expense to manage, employers can also view them as a tool for building a healthier workforce, enhancing the employee experience, and influencing long-term healthcare costs.
Looking ahead
As employers evaluate renewal increases and plan for 2027, the data points to a clear trend: organizations are looking for sustainable ways to balance cost control with employee well-being.
For Ohio employers interested in exploring approaches that emphasize prevention, education, and proactive health management, programs like ERChealth offer a practical example of how a benefits strategy can support both your workforce and long-term cost control. Learn more about ERChealth.
