Healthcare costs are rising. Here's how brokers can help employers respond

As employers prepare for 2027 renewals, they face a familiar challenge with growing urgency: Healthcare costs continue to rise while employees remain increasingly sensitive to out-of-pocket expenses. Medical cost trends are expected to remain elevated, fueled by higher pharmacy spending, increased behavioral health utilization, provider reimbursement pressures, and demand for specialty medications.

For brokers, this environment presents an opportunity to move the conversation beyond annual rate increases and toward strategic plan design. The most effective renewal strategies will balance three priorities: affordability, employee protection, and compliance.

Moving beyond cost-shifting
For years, employers have responded to rising healthcare costs by increasing deductibles, coinsurance, or employee contributions. While these measures can reduce premiums, they often shift financial burden to employees and may discourage them from seeking needed care.

As a result, many employers are exploring alternatives that preserve affordability without sacrificing value. One approach gaining momentum is pairing high-deductible health plans with supplemental protection, allowing premium savings to be redirected into benefits that provide meaningful support when employees access care.

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Gap coverage as a strategic renewal tool
A growing number of employers are combining high-deductible major medical plans with gap insurance to address rising costs. This strategy can lower overall medical plan expenses while helping employees manage the financial risks associated with higher deductibles.

When designed effectively, gap coverage can provide first-dollar benefits that offset eligible medical expenses before employees satisfy their major medical deductible. This creates a more predictable financial experience and can reduce concerns about delaying care due to upfront costs.

For employers facing significant renewal increases, the appeal is clear. Rather than choosing between absorbing higher costs or reducing benefits, they can redesign plan structures to better balance budget realities with employee financial well-being.

For brokers, the conversation should focus on outcomes rather than products: improving affordability, reducing financial stress, and helping employees feel more confident using their healthcare benefits.

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Addressing the needs of variable-hour workforces
Many employers also face growing challenges around Affordable Care Act (ACA) compliance and affordability, particularly those with large populations of variable-hour, seasonal, or part-time workers.

Industries such as hospitality, staffing, agriculture, retail, construction, and security often struggle to maintain competitive benefits while managing tight budgets. In these environments, traditional major medical plans may not always align with workforce needs or employer resources.

ACA-compliant strategies that combine Minimum Essential Coverage (MEC) with fixed indemnity benefits can provide an alternative path. MEC helps employers satisfy applicable ACA requirements, while fixed indemnity coverage provides scheduled benefits that can help employees manage common healthcare expenses.

For employers with variable-hour populations, these solutions can create a practical middle ground between offering no meaningful coverage and absorbing the full cost of traditional major medical plans.

For organizations facing even greater financial pressures, a MEC and fixed indemnity strategy may also serve as an alternative to traditional major medical coverage. This approach combines ACA-required preventive care coverage with first-dollar benefits that can help cover physician visits, urgent care, emergency room services, hospitalization, surgery, prescription drugs, and other healthcare expenses.

Because coverage is typically offered on a guaranteed-issue basis with no pre-existing condition exclusions, employees can access benefits immediately without the high deductibles often associated with traditional plans. For many employers, this can provide a more affordable and predictable way to offer healthcare benefits while still delivering meaningful value to employees.

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Supplemental benefits are becoming essential
Perhaps the most significant shift heading into 2027 is that supplemental health benefits are no longer viewed as optional add-ons. Increasingly, they are becoming critical components of an overall benefits strategy.

As employee cost-sharing continues to rise, supplemental solutions help address financial gaps that major medical coverage alone may not fill. Employers are recognizing that the success of a benefits program depends not only on controlling premiums but also on protecting employees from unexpected healthcare expenses.

The goal is no longer to offer more benefits. It is to offer smarter benefits that align with workforce needs, support financial well-being, and create a sustainable path forward.

The broker's opportunity
The brokers who create the most value during the 2027 renewal season will be those who move beyond rate comparisons and act as strategic advisors. Employers need guidance on managing healthcare inflation, maintaining competitiveness, and navigating compliance requirements without compromising employee protection.

Whether through gap coverage paired with high-deductible plans, ACA affordability strategies for variable-hour populations, or MEC and fixed indemnity solutions, brokers have access to tools that can help employers rethink their benefits strategy.

In a year defined by rising costs, success may not come from spending less. It may come from spending benefits dollars more strategically, where they can deliver the greatest impact for both employers and employees.