The Wall Street Journal reports that U.S. businesses are facing the biggest health-insurance cost increases in 15 years or more. Costs for employer coverage are expected to go up about 9.5% in 2026. The recent average is around $25,500 for a family plan. Employers are trying to adjust by changing plan designs, or pushing more costs to employees. Others are looking at new plan designs that could include changes such as limits on access to certain doctors or hospitals or to certain expensive drugs such as those for weight loss. Some of the newer ideas include reference-based pricing vendors which determine a provider’s payments from Medicare rates, plus a premium ranging from 25-50%; use of individual coverage plans, not group plans, to help employees buy coverage on the exchanges; the use of catastrophic/bronze plans as part of HSA along with other options which can reduce employer premium costs while keeping competitive with new catastrophic options. The idea of the latter is to have an Obamacare-compliant core plan but add HSA-qualified catastrophic plan options to be more competitive to retain younger/healthier workers while maintaining compliance. Obviously, employers will continue to negotiate with vendors to offset some of the cost increases. Some employers are experimenting with their own tools to manage healthcare costs such as packages for gym memberships and fitness apps.
Premiums are also surging for ObamaCare health insurance coverage, and more are exploring so-called catastrophic coverage, as median Affordable Care Act (ACA) premiums next year are reportedly increasing around 18%, and there are changes in enrollment rules expected to lead to fewer enrollees next year.
Individuals who make too much or too little to qualify for assistance on the Obamacare health insurance exchanges can apply for an exemption to purchase catastrophic plans during open enrollment starting November 1 according to guidance issued by the Trump administration.
Catastrophic health plans have low monthly premiums and very high deductibles. They may be an affordable way to protect individuals from worst-case scenarios, like getting seriously sick or injured. If individuals qualify for premium tax credits or cost-sharing reductions a Bronze or Silver plan may be a better value.
People under 30 and others who qualify for a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable) are eligible for catastrophic health plans. Anyone who does not qualify for advanced premium tax credits or cost-sharing reductions can apply for a hardship exemption to purchase a catastrophic plan. This includes making less than 100% or more than 250%, of the federal poverty level.
Catastrophic plans cover the same 10 essential health benefits as other Marketplace plans, including preventive services at no cost. They also cover at least 3 primary care visits per year before the deductible. For more information go to: Catastrophic health plans | HealthCare.gov
Separate from the catastrophic health plan rules, changes in the Obamacare enrollment rules are expected to result in as many as 1.8 million fewer enrollees next year. The changes are intended to reduce significant fraud. For example, the Congressional Budget Office reported that 2.3 million enrollees intentionally overstated their income to obtain premium tax credits in 2025. A federal judge in Maryland paused the changes to the enrollment rules before they were scheduled to take effect, but the Trump administration has appealed the decision.
In general, these rule changes should not affect employers, but it is possible that some employers will benefit if employees are no longer eligible for premium tax credits or cost sharing reductions.
This article is part of our November 2025 Newsletter.
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