Rising healthcare costs remain one of the most persistent and complex challenges facing HR leaders today. According to the Kaiser Family Foundation’s 2025 Employer Health Benefits Survey, average employer-sponsored family premiums reached $26,993, with employees contributing nearly $7,000. Meanwhile, broader U.S. healthcare spending grew 7.5% to $4.9 trillion, outpacing overall economic growth, according to the American Medical Association.
For organizations navigating talent shortages and evolving workforce expectations, maintaining competitive benefits without overwhelming budgets has never been more urgent. Members of the Senior Executive HR Think Tank bring a nuanced perspective: cost management is no longer just about premiums or deductibles. It requires rethinking how benefits are designed, communicated and aligned with organizational culture.
From prevention-focused care models to AI-driven analytics and collaborative purchasing strategies, these experts outline actionable approaches that prioritize both financial sustainability and employee well-being.
“Cost shifting to employees is the most expensive long-term strategy an organization can choose.”
Understand Prevention and Belonging Are the Real Cost Drivers
Christopher Bylone, Principal Strategist at Innovation Unbiased, emphasizes that healthcare strategy must start with prevention and access.
“The most underrated lever in this conversation is investment in prevention and mental health access,” Bylone says. “Organizations that make it genuinely easy to get ahead of a health issue spend less time managing the crisis of one.”
He warns against shifting costs to employees. “Cost shifting to employees is the path of least resistance and the most expensive long-term strategy an organization can choose,” he explains. “When people delay care because out-of-pocket costs are too high, downstream costs in lost productivity and turnover far exceed whatever was saved on premiums.”
Beyond finances, Bylone highlights the cultural impact: “Benefits equity cannot be an afterthought. Who can afford to use the plan, and whose health needs are reflected in what is covered—those are belonging questions wearing a benefits label.”
Ultimately, he reframes the issue: “How an organization responds to rising healthcare costs is not a financial decision. It is a cultural one. Employees are watching what gets protected and what gets cut.”
“Organizations thrive when their people and their risks are cared for with equal intention.”
Align Benefits Strategy With Risk and Business Goals
Juanita McClure, Founder and CEO of Nona HR and Risk Consultants LLC, emphasizes balancing people and risk.
“Organizations thrive when their people and their risks are cared for with equal intention,” McClure says. Wellness and safety programs are the bridge between health insurance and workers’ compensation strategies.
“If you want to drive down cost while keeping a competitive benefits offering, an intentional strategic focus that aligns with the organization’s overall goals must be developed,” she explains. “This is a long-term approach that protects both your biggest asset—your people—and your business.”
She cautions that many organizations pursue cost-containment tactics without a cohesive framework: “There are many approaches to cost containment and plan design, but without strategic alignment, they may not have the desired impact you are seeking.”
Use AI to Move From Reactive to Proactive Cost Control
Chuck Gallagher, President of Ethics Resource Group, highlights AI’s transformative role.
“The rising cost of healthcare is a real problem, but with new tools, there are ways to manage it that we haven’t fully explored,” Gallagher says. “AI-driven analytics now allow employers to move from reactive cost control to proactive risk management.”
AI platforms can identify emerging cost drivers, including chronic conditions, specialty drugs and avoidable ER visits. Solutions like Accolade and Rx Savings Solutions guide employees toward high-quality, cost-effective care.
Gallagher emphasizes: “The opportunity isn’t cutting benefits—it’s using AI to design smarter, more targeted strategies.”
Invest in Prevention and Smarter Care Navigation
Nicole Cable, Chief People and Experience Officer at Blue Zones Health, brings healthcare system experience.
“Healthcare costs continue to rise because the system rewards treatment more than prevention,” Cable says. “If HR leaders respond only by shifting costs to employees, we solve a budget problem but create a workforce problem.”
She points to predictable cost drivers: unmanaged chronic conditions, avoidable ER visits and delayed preventive services. “The most sustainable strategies invest in prevention, primary care access and navigation support so employees can make better decisions earlier in the care journey,” she says.
Cable reframes the goal: “The goal is not cheaper healthcare. The goal is healthier people and smarter use of care.”
Drive Engagement Through Incentives and Personalization
Steve Degnan, Advisor and Former CHRO, emphasizes employee behavior.
“Getting your employees to take wellness seriously is an uphill climb,” Degnan says. “But stay after it with helpful apps and incentives built into coverage.”
He advocates for expanding traditional incentives and leveraging AI for personalized coverage. “This is one way to make it a reality.”
“Join with local businesses to form a coalition to address healthcare costs.”
Explore Alternative Plan Designs and Collective Buying Power
Lauren Francis, Founder and CEO of Mulberry Talent Partners, offers practical approaches.
“Unless your company is self-insured, you are often at the mercy of the health insurance industry regarding rates,” Francis says.
She offers two strategies worth considering: 1. Pair high-deductible plans with virtual care and wellness benefits, and 2. Join coalitions of SMBs to increase purchasing power.
Regional health coalitions have demonstrated real cost and transparency benefits.
Design Benefits With Clarity, Trust and Purpose
Amy Douglas, Chief, Culture and Connection at Levata Human Performance, stresses intentional design.
“Rising healthcare costs require HR leaders to move beyond cost-cutting and focus on intentional design and informed tradeoffs,” Douglas says.
Clarity, trust and transparent communication are essential. She notes, “When leaders translate complexity into clear, human terms, employees are more likely to engage and make better decisions.”
Douglas adds, “This isn’t about offering more—it’s about offering what’s most meaningful, sustainable and aligned with the realities people are navigating today.”
Actionable Strategies for HR Leaders Navigating Healthcare Costs
- Invest in prevention and mental health access.
Early intervention reduces long-term costs while strengthening employee engagement and retention. - Align benefits with the overall business and risk strategy.
Integrated planning ensures cost-containment efforts deliver meaningful, sustainable impact. - Leverage AI and data for proactive decision-making.
Advanced analytics can identify cost drivers early and guide smarter care choices. - Prioritize primary care and navigation support.
Helping employees make better decisions earlier reduces expensive downstream care. - Use incentives and personalization to influence behavior.
Targeted rewards and tailored plans can drive healthier choices and lower costs. - Explore alternative plan designs and partnerships.
Coalitions and hybrid benefits models can improve affordability and transparency. - Communicate clearly to build trust and engagement.
Employees make better decisions when benefits are easy to understand and aligned with their needs.
A Smarter Path Forward for Benefits Strategy
Managing rising healthcare costs is no longer about incremental adjustments—it requires a strategic shift. As HR Think Tank members make clear, the most effective approaches prioritize prevention, leverage data, align with organizational goals and center the employee experience.
Organizations that treat benefits as both a financial and cultural investment will be best positioned to succeed. Thoughtful, transparent and proactive strategies allow HR leaders to control costs while building healthier, more resilient workforces.
