Health Insurance Costs Hit a 15-Year High. Companies Are Changing How They Cover Employees.

Health Insurance Costs Hit a 15-Year High. Companies Are Changing How They Cover Employees.

Mon, August 17, 2026 at 7:10 PM GMT+3 1 min read

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Group health insurance might be going the way of the pension. Just like companies swapped guaranteed pensions for 401(k)s and handed employees the responsibility of managing their own retirement, a growing number of employers are now handing workers cash instead of a company-picked health plan, Bloomberg reports.

The reason for the shift is economics. Group plan costs are expected to hit $18,500 per employee this year, a 6.7% jump, the steepest increase in 15 years, according to Mercer. Employers are responding by ditching traditional group plans whole sale.

More than 20,000 companies switched to Health Reimbursement Arrangements (HRAs) in 2026, a 53% jump from last year, according to a new report from the HRA Council, cited by Bloomberg. Instead of managing a group plan, companies using HRAs just hand employees cash to go buy their own coverage on the ACA marketplace.

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