Increasing Health Insurance Costs: How to Regain Control

Health insurance premiums are climbing faster than ever. In 2025, the mean increase for small business plans is 9.4%, according to NFIB. A mix of high inflation, rising demand for costly GLP-1 medications like Ozempic, and slammed primary care providers have driven this spike.

Before 2022, annual renewals hovered at 4–6%, and many businesses simply renewed without exploring alternatives. Today, that same approach can result in double digit increases, forcing companies to either pass costs to employees, raise deductibles, or slow hiring.

In the new economic landscape, business owners must take an active approach to benchmarking their benefits package annually.

The Unintended Consequences of Doing Nothing

If a small business receives an unfavorable increase it has material, real world effects. The business might be forced to dilute benefit offerings for staff to mitigate the increases. This would result in higher deductible, lower coinsurance plans for staff.

Sure, the business may be able to absorb the increase but at the detriment of slowing hiring or implementing new initiatives. More likely than not, the businesses will simply keep their contribution structure the same and pass along the increased costs to employees, which may trickle down and lead to unwanted employee attrition.

It doesn’t have to be a trade off.

How PEO's Help

By pooling together their clients, PEOs negotiate more attractive rates and access to robust benefits plans traditionally reserved for Fortune 500 companies.

3 top reasons to explore a PEO:

• Lower premiums by 15-40%
• Better benefits to attract and retain staff
• All in one HR, payroll ^and multi-state compliance platform
  

Rising health insurance premiums aren’t going away, but you are not powerless. With the right tools, partners, and proactive planning, your business can stay ahead of the curve.

Need Help Evaluating Your Current Health Plan?

Don’t let rising health insurance premiums derail your budget. Book a free strategy session with a team member.