How to Tell Employees Health Insurance is Going Up
2027 will be another year of skyrocketing costs. We have 7 tips on delivering the news.
It’s coming up to the time of year when employers deliver bad news to workers, and this year the news is worse than usual.
Every year, the open enrollment period confronts many employees with choices they don’t understand. But this year they’ll understand this: They’re again paying more in 2027 for health coverage that’s the same or worse than the year before.
Employer health care costs are predicted to climb 9% in 2027, the largest jump in 17 years, according to an annual report by Big Four accounting firm PwC, released in June. It’s likely to be the fifth straight year to see increases of at least 8%.
The news is even worse for employees of small firms, with a 14% median jump in premiums nationwide, according to research by healthcare research organization KFF, released this month.
Here’s the problem.
“Employer motivation may lie at the heart of the American health-cost dilemma,” a trio of authors led by Dr. David Blumenthal, a Harvard University public health professor, wrote in December in the Harvard Business Review. “Health spending is not only complicated and frustrating; it may also be marginal to the financial welfare of many companies.”
But the cost of healthcare is much more than marginal to the finances of many workers.
Employees often pass over the announcement of the open enrollment period because language is boring and they think there’s nothing new. They realize the importance only when they dig into the options.
Writing an effective employee announcement about 2027 healthcare costs won’t solve the problem identified by Blumenthal, but we’d like to think it’s a start. Here are our seven tips to writing that message:
1. Lay the groundwork. The announcement of next year’s health care costs will come amid a long-running problem. Workers don’t take advantage of the employment benefits offered, and this is no less true when it comes to healthcare.
For example: “Employers are spending more on women’s and family health, but that is not always being felt by employees,” according to Fierce Healthcare, citing a study by telehealth startup Maven Clinic released in February.
Stronger communications with employees would increase employees’ use of the benefits they have. That in turn might make the 2027 cost hikes less worrisome.
It’s too late for 2027, but not too late to start for 2028’s increases.
2. Read insurance news. Stories about rising health care costs are starting to hit the news in advance of the open enrollment period, which typically starts Nov. 1. These are what some of your employees will see or hear about.
Good reporters don’t start a story without reading what used to be called “newsclips.” You should too. You’ll want to imitate the style of the better news outlets, factual and straightforward.
3. The first sentence. Typical open enrollment announcements are dry. With kind of bad news many companies bury it in the middle or end of the announcement, like when Southwest Airlines announced layoffs last year.
Maybe CEOs and senior leaders think explanations and context soften the blow. It has the opposite effect. It makes leaders appear like they’re making excuses or downplaying the bad news.
Better to cut to the chase, an idiom that dates to the silent film era.
4. Empathize. Even upper class and upper-middle class Americans are worried about their finances, according to a survey by The Wall Street Journal published in June. Even among adults under age 65 with health insurance, 38% worry about paying their monthly premiums, according to a tracking survey updated in April by KFF.
To employees, these changes to their health insurance feel like a pay cut. Acknowledge that.
“Knowing empathy matters is not the same as practicing it,” according to a post in March on the website of Northeastern University’s business school.
5. No hand-wringing. Often employers blame increases on the trends in the health care industry as if it’s like the weather, something out of their control.
To be a competitive employer, leaders must provide the greatest possible health care coverage at the lowest possible cost. Tell employees you accept that responsibility.
“Healthcare affordability is no longer just a benefits issue; it is a business issue, a workforce issue and a wage issue,” Shawn Gremminger, CEO of the National Alliance of Healthcare Purchaser Coalitions told the human resources news outlet HR Dive last week.
6. Use examples. It’s difficult to generalize about employees’ health care out-of-pocket costs because there are so many variations in terms of family size and coverage options. But the announcement should do more than offer generalities.
Make the announcement more concrete by offering a couple examples of typical workers.
7. What are you doing? Health care costs are a big problem. Like any challenge facing a company, employees want to know what their leaders are doing about it.
CEOs that are genuine about improving employees’ health care while slowing cost increases are doing more than hiring consultants.
“Frustrated by soaring health care costs without corresponding improvements in quality, employers continue to take matters into their own hands to transform the health care system on behalf of employees and their families,” according to the American Benefits Council, which in July released a 42-page report with case studies of companies’ cutting-edge initiatives.
If your organization is already one of those employers, informing employees about their 2027 costs is the time to update them on those efforts and announce new ones.
If your organization isn’t one of those employers, then the internal communications team should propose joining the ranks of these innovative companies. Sometimes great things start with the comms team.
Many companies are reticent to speak out on political issues. Yet employees expect and the public accept that companies will work to change government policies that affect the business.
Isn’t the skyrocketing cost of healthcare one of those issues?
Tom Corfman, a senior consultant with Ragan Consulting Group, knows what a headache healthcare is to write about. He covered it during part of his 25-year career as a journalist. Do you need help with a communications plan for your organization’s open enrollment period? Email Tom to set up a free call with him and RCG co-founder and senior partner Jim Ylisela.
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