Healthcare costs are rising. Is your employee benefits provider keeping up?

Rising healthcare costs continue to put pressure on employers, making employee benefits one of their most closely scrutinized operating expenses.

Health plans are projecting medical cost trends of 9% in 2027, the highest level in 17 years, underscoring the growing pressure employers face as healthcare spending continues to rise¹. As a result, 66% of employers with 500 or more employees say they are likely or very likely to raise premiums in 2027, while about half are considering additional cost-sharing measures such as higher deductibles and increasing out-of-pocket maximums².

Faced with these challenges, employers are doing more than adjusting medical plans. They’re reevaluating the role their employee benefits provider plays in helping them control costs, navigate an increasingly complex healthcare system and improve measurable results. Furthermore, organizations expect strategic guidance throughout the year and are more willing to explore alternative partners when that support falls short³.

Today’s employers are increasingly evaluating whether their benefits partner is helping them stay ahead of rising costs and changing workforce needs or simply guiding them through another renewal cycle.

Why employers expect more from their employee benefits provider

For years, employers viewed their broker or consultant primarily as a resource for annual renewals, carrier negotiations and plan administration. Today, that role has expanded.

As healthcare spending continues to rise, employers are under pressure to demonstrate that every dollar invested in benefits is producing value for both the organization and its employees. At the same time, they’re being asked to improve the employee experience, remain competitive in attracting talent and manage costs responsibly.

Complicating matters further is the rapid expansion of the benefits marketplace. New benefits vendors and targeted healthcare programs enter the market every year, offering services that range from specialty pharmacy management and care navigation to mental health support and chronic condition management. For many employers, the challenge is no longer finding solutions. It’s determining which programs are delivering value.

As a result, employers are looking for benefits partners that can help them understand what’s driving costs, identify which programs are producing results and make more informed decisions about where to invest resources. Larger employers, in particular, are reviewing claims trends, pharmacy spending and vendor performance throughout the year rather than waiting until renewal season.

How benefits administration complexity impacts costs and outcomes

As employee benefits programs have evolved, many organizations have accumulated a growing number of vendors, platforms and specialty programs. While each may address a specific need, the result can be a fragmented benefits ecosystem that is difficult to manage and even harder to evaluate.

Multiple vendors, reporting systems and employee touchpoints often make it challenging to understand what’s working, where costs are accumulating and whether investments are delivering meaningful results. According to industry research, 73% of employers are considering or actively trying to consolidate vendors⁴. As organizations look for greater efficiency, many are questioning whether adding another vendor solves the problem or simply adds another layer of complexity.

Why ROI matters more than ever in employee benefits

Perhaps the biggest change shaping employer expectations is the growing focus on measurable outcomes. Employers increasingly need to justify benefits spending to leadership teams facing pressure to control costs across the organization. As a result, they want clearer evidence that their benefits investments are improving outcomes and supporting workforce goals.

Industry research indicates that employers may be overlooking some of the strategies most frequently associated with higher returns, including network optimization, specialty pharmacy management, centers of excellence and care navigation programs⁵.

That disconnect highlights a growing challenge: making benefits decisions in a crowded marketplace where more choices do not always lead to better results. As benefits budgets come under greater scrutiny, employers are looking for reporting, benchmarking and accountability that demonstrate whether benefits strategies are delivering measurable outcomes.

What employers should consider before making a change

For many organizations, the decision isn’t simply whether to change providers. It’s whether their current benefits strategy is positioned to meet future challenges. Evaluating a provider can help employers determine whether they have the expertise, data and guidance needed to navigate rising costs and increasing complexity.

Before making a change, employers should consider:

• Does the provider deliver strategic guidance throughout the year or primarily support annual renewals?
• How do they identify and address emerging cost drivers?
• Can they demonstrate measurable outcomes and return on investment?
• What analytics, reporting and benchmarking capabilities do they offer?
• Can they help simplify a complex benefits ecosystem while improving the employee experience?
• How do they support business objectives, not just annual benefits decisions?

The most effective benefits partnerships are built on more than transactions. They are built on shared accountability, continuous improvement and a clear understanding of organizational goals.

Partnering for a more strategic employee benefits program

As healthcare costs rise and benefits programs become increasingly complex, employers are rethinking what they need from their employee benefits provider. More organizations are looking for partners who can simplify complexity, deliver measurable value and provide guidance that extends well beyond renewal season. Employers that take a thoughtful approach to evaluating those partnerships may be better positioned to manage costs, enhance the employee experience and adapt to a changing benefits landscape.

Ready to evaluate your employee benefits strategy? Contact Huntington Insurance to learn how our team can help support your goals.