Approximately 165 million Americans get their health insurance through work, and yet most don't spend much time thinking about what benefits their employer will offer and how much they will cost.
In fact, employees spent an average of only about 45 minutes per year deciding which benefit options would best suit them, an Aon report found.
The open enrollment period, which typically lasts until early December, provides an opportunity to take a closer look at what it's all about.
And first of all, the costs increase significantly.
The costs are rising
The costs of healthcare have been rising steadily for years. There has been a significant increase more recently.
These cost increases for employers are reaching post-pandemic highs, according to WTW, a consulting firm formerly known as Willis Towers Watson. U.S. employers expect their health care costs to rise 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023, the company said.
Because of higher costs, employers are considering new ways to adjust their plan offerings, WTW noted.
To date, 52% of companies said they plan to implement programs to reduce overall costs, and just as many plan to shift to lower-cost providers and treatment locations, potentially resulting in a narrower network of physicians to choose from.
According to professional services firm Aon, employers currently subsidize an average of about 81% of the cost of health insurance, while employees pay the rest.
However, some of the higher costs are inevitably passed on to the employees.
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About a third, or 34%, of employers expect to shift some costs to employees in the coming year through higher premiums or increasing copays for high-deductible health plans, the WTW report said.
Costs per employee are expected to increase by an average of 5.8% in 2025, according to a separate report from consulting firm Mercer. This is the third year in a row that health care costs have risen by more than 5%, after a decade of only about 3% on average.
“These are changes that employees will feel,” said Beth Umland, research director for health and human services at Mercer.
For workers, health care spending is already high: Family premiums for employer-sponsored health insurance rose 7% this year to an average of $25,572, the 2024 KFF Benchmark Employer Health Survey found. More than $6,200 of that amount is the responsibility of employees, while the rest is borne by employers.
“As cost increases peak post-pandemic, companies are concerned about the burden they are placing on their workforce, particularly as it impacts decisions about insurance coverage and care,” said Tim Stawicki, chief actuary for health and benefits at WTW, in a statement.
Consider your healthcare expenses
Employees are often presented with options for choosing a health insurance plan: one with a higher monthly cost, called a premium, and a lower deductible, which is the amount you must pay before your employer's plan takes effect, and another option with a higher one Out-of-pocket costs, but lower premiums.
“When you go through open enrollment, the first thing you see is usually the deductible and out-of-pocket costs,” said Regina Ihrke, WTW North America director of health, equity and well-being.
When weighing options, look to previous years, says Gary Kushner, chairman and president of Kushner & Company, a benefits design and administration firm.
He said you should think, “Am I a low, medium or high family? Did I have an incident that required acute care or basically a lot of preventative care?”
If you normally only go to the doctor once a year for a check-up, you can opt for the so-called high deductible plan with the lower monthly costs.
Health Savings Accounts
In addition to high-deductible health insurance, more than 50% of employers also offer a Health Savings Account (HSA), which can help with additional health care costs.
To use an HSA, you must have an eligible high-deductible health insurance 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 allowable contribution each year: The new HSA contribution limit for 2025 is $4,300 for individuals, up from $4,150 in 2024, and $8,550 for families, up from $8,300 in 2024 Year 2024. Employees age 55 and older can earn an additional $1,000 in catch-up contributions above the annual IRS limits.
The HSA contributions then grow tax-free and the funds can cover out-of-pocket costs, including doctor's visits and prescription medications, including expensive weight-loss medications.
As costs continue to rise, HSAs are an important safety net for dealing with these out-of-pocket costs, WTW's Ihrke said. Unused funds can be rolled over from year to year.
“Make sure you think about how you can put some money into the savings account so you can use it to pay a medical bill or save it for years to come,” Ihrke explained.
Life and disability insurance
With open enrollment, employees may also be offered various disability and life insurance options, often included in a standard benefits package.
Employer-issued life insurance policies typically cover one year's salary. You can take out additional life insurance through your employer. This is called supplemental life insurance or voluntary life insurance and is optional coverage that you can add to your employer's basic group policy.
There are basically two types of occupational disability insurance: Short-term disability usually replaces 60 to 70% of your basic salary and the premiums are often covered by your employer. Long-term disability, which typically occurs after three to six months, typically replaces 40 to 60% of your income.
Even if you have these policies for work, it may only be a fraction of what you need to protect small children or other dependents.
Think about what amount is right for you and your family, then consider whether you want to take out additional insurance or additional insurance through your group plan at work, or take out your own policy, which many advisors recommend.
Benefit from voluntary services
Additional benefits may be optional, but they are just as important these days, especially when it comes to well-being. According to a recent report from Gallagher, nearly one in five open enrollment employees report worsening mental health.
“Now more than ever, we are seeing employers wanting to address the evolving needs of their workforce,” said Tom Kelly, head of Gallagher’s health and benefits practice, and “today’s workforce is looking for more holistic support for their well-being.”
