5 FRESH AND PRACTICAL STRATEGIES TO SHRINK RISING COMMERCIAL HEALTHCARE COSTS

Keeping employees happy and healthy is critical for organizational success. But with healthcare costs projected to grow by 8% in 2025, finding ways to manage budgets while maintaining high-quality benefits has become more challenging than ever for benefits leaders. Commercial healthcare spending is on track for its fastest growth in 13 years, leaving companies searching for strategies that tackle these rising costs head-on.

The good news? It’s not all doom and gloom. Industry-leading benefits teams are already changing how they deliver Health Savings Account (HSA)-centric benefits to dramatically reduce costs while delivering significantly improved employee outcomes.

Curious? Here are five practical, data-backed, industry-leading strategies your peers are already using.

1. Set A Benchmark For Success

How can you know where you’re going without knowing where you’re starting? Benchmarking your HSA contribution strategy plan is a critical first step. Comparing your program’s performance against similar organizations in your industry ensures your plan isn’t just competitive but also aligns with employee happiness and affordability. The unfortunate reality is that many benefit teams have taken a “set it and forget it” approach to their HSA contribution strategy and lived with unintentionally mediocre impact. There is a valuable opportunity to revisit your strategy for even better results.

How to benchmark effectively:

• Assess your HSA plan contribution levels. With the average annual employer contribution at $650 (single) and $1,300 (family), are you keeping pace? What new strategies are being deployed? What strategies drive superior engagement with employees?
• Take a deep look at your current contribution strategy. When was the last time you adjusted this to meet evolving employee needs and better engage your workforce?

Impact: Organizations that consistently assess the performance of their HSA benefits can uncover disparities early and offer better value while controlling costs. Thoughtful organizations are using benchmarking to deeply engage employees and enable the average family to build a safety net for healthcare costs that exceeds $10,000 within three years – all while reducing healthcare costs for the organization by millions of dollars each year. Intelligent benchmarking is a definite game changer.

2. Implement Default HSA Contributions

Most employees readily understand the impact of an employer contribution but miss the second contribution that employers make into their HSA—premium savings. Helping employees capture and build on these savings can increase the average HSA balance by as much as $1,200 per year. Only 20-30% employees are tapping into and capturing these savings today. Here’s how it works. If a high-deductible health plan (HDHP) premium costs employees $100 less per month than a PPO plan, employers can set employees up to automatically contribute that $100 savings into their HSA. This automatic contribution comes straight from the employee’s paycheck, ensuring seamless execution without impacting their take-home pay.

Why it works: Employees don’t miss what’s never in their pocket, but they certainly notice the long-term impact. This strategy builds peace of mind and aligns with behavioral economics principles proven to encourage financial wellness. The best part of this is that 90% of employees will keep this default contribution — and will increase it by 25% every year as they see their HSA balances build.

3. Create A Deductible Safety Net With Interest-Free HPAs

What happens when employees face (or even see) big deductibles? Stress. Even the most affordable plans leave employees with thousands of dollars of exposure annually, which can lead to skipped care or intensifying financial pressure.

Enter the Health Payment Account (HPA): Essentially, an interest-free, fee-free loan used for health, dental and vision expenses. Employers can offer an HPA as a safety net for all employees, and those who haven’t hit their deductible will have an extra way to manage costs without financial strain.

Benefits for employers: Increased confidence in high-deductible plans, making it easier to shift employees to lower-cost HDHPs, and peace of mind for employees, reducing the hesitation to enroll.

Real-life impact: Typically, only 10-15% of employees hit their deductible each year, but every employee fears that they will be among this unlucky group. Offering a deductible safety net dramatically improves enrollment rates in HDHPs by taking away this fear factor, while maintaining a positive experience for employees. The result is a win-win: employers save more as HDHP enrollment accelerates. Employees get peace of mind by confidently getting the care they need and seeing their HSA balances rise faster than ever.

4. Default Employees Into HSA Plans

When it comes to major decisions like healthcare, most employees rely on passive defaults after the initial decision is made. By defaulting new hires (and ideally current employees) into HSA-qualified HDHP plans, you can achieve dramatic cost savings.

Why this works for companies and employees alike: 70-80% of employees stick with the default option, ensuring strong adoption without heavy-handed mandates. HSA plans can typically be 9-15% less expensive than PPO alternatives. Over time, savings generated from increased adoption can go toward funding richer employee benefits.

Pro Tip: Remember to combine this strategy with Health Payment Account support for employees facing higher deductibles to ensure retention of those in high-deductible plans.

5. Enhance Employee Education And Engagement

The strength of your benefits package isn’t just what you offer; it’s how well your employees understand and use it. Education plays a pivotal role in empowering employees to take full advantage of their benefits. Thoughtful education combined with the structural changes we recommend earlier can make your benefits unbeatable.

Actionable tactics to boost education:

• Year-round engagement—not just during enrollment periods—fosters continuous awareness.
• Personalized tools can provide real-time nudges that align with employees’ lifestyle choices and healthcare use. These nudges, like preventive care reminders and chronic care alerts, help reduce costs for both the employer and employee.
• Clear, engaging content promoting benefits utilization has been shown to boost overall enrollment satisfaction, as research-backed nudges often “move the needle” in employee behavior.

Case in point: An eCommerce company leveraging default employee HSA contributions and targeted education campaigns saw a 104% boost in HSA adoption and achieved a significant 11% in savings compared to PPO plan holders.

HOW YOUR ORGANIZATION CAN TAKE THE NEXT STEP

Rising healthcare costs don’t have to be an unsolvable problem. With these innovative approaches, you can reduce expenses while improving employee satisfaction and engagement. These strategies not only help your business’s bottom line but also build goodwill with employees by offering financial security and healthcare affordability.

As I close, my main message is: start today. Benchmark your contribution strategy, help employees make smart HSA contributions, and educate your employees. You have the tools, data, and insights to lead the way in creating smarter, more cost-effective healthcare solutions.