Compliance updates, analysis, plus HR and payroll best practices from HR One
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Health insurers in New York have submitted proposed rate increases for next year, with an average requested increase of 25.7% in the small-group market. These requests are not final, and the New York State Department of Financial Services may approve lower increases. Still, the direction is difficult to ignore.
For employers, the usual response will be familiar: compare carriers, review plan designs, adjust contributions, and determine how much additional cost the organization and its employees can absorb.
Those conversations are necessary. But 2027 may also require a broader question:
"Are we still building benefits packages in the most effective way?"
Health Insurance Is Not the Same as a Benefits Strategy
For many organizations, health insurance consumes so much of the benefits budget that it effectively becomes the benefits strategy.
As premiums rise, employers may spend significantly more simply to maintain the same plan. Employees may also pay more while still facing deductibles, copays, coinsurance, and other out-of-pocket costs.
The organization spends more. Employees spend more. Yet neither necessarily feels better protected.
That is not simply a cost problem. It is a benefits strategy problem.
Could a Lower-Cost Medical Plan Create More Flexibility?
One option employers may want to explore is whether a lower-cost medical plan could serve as the foundation of a broader benefits package.
For example, an employer might evaluate a lower-premium Bronze-level plan and pair it with access to voluntary benefits such as accident, critical illness, hospital indemnity, life, or disability-related coverage.
The potential advantage is flexibility.
Major medical remains the foundation. Voluntary benefits do not “make up for” health insurance, nor are they a substitute for comprehensive medical coverage. Employers subject to the Affordable Care Act’s employer mandate must still ensure that their medical coverage satisfies applicable coverage, minimum-value, and affordability requirements. Voluntary benefits supplement that coverage; they do not replace or alter those obligations. But they can give employees opportunities to select additional protections based on their own needs, priorities, and financial circumstances.
That matters because the workforce is not one benefits consumer.
A younger employee focused on keeping payroll deductions manageable may have different priorities than a parent with young children, an employee managing a chronic condition, or someone approaching retirement. A more flexible structure recognizes that employees have different risks and responsibilities.
Cost Control and Employee Choice Do Not Have to Be Opposing Goals
Benefits conversations often assume a tradeoff: either the employer controls costs or offers employees a strong benefits package.
That may be too simplistic.
A lower-premium medical option, paired thoughtfully with voluntary benefits, may create an opportunity to manage overall benefits costs while expanding employee choice.
This approach will not be right for every organization. Plan design, affordability, workforce demographics, participation, and communication all matter. But employers should be willing to challenge the assumption that paying more each year to preserve the same benefits structure is the only responsible path forward.
As 2027 planning begins, the question should not only be:
"How much more is health insurance going to cost us?"
HR leaders should also ask:
"How can we structure our benefits investment to provide the greatest value to a workforce with different needs?"
Start the Conversation Before Renewal Season
Waiting until renewal season often turns benefits planning into a defensive exercise focused on absorbing increases, shifting costs, raising deductibles, or reducing coverage.
Now is the time to explore alternatives.
HR One has partnered with the benefit advisors at Advanced Business Consulting to help employers explore voluntary benefit strategies and consider how those options may fit into a broader approach to 2027 benefits planning.
If your organization is concerned about rising health insurance costs, considering lower-cost medical plan options, or interested in giving employees more flexibility and choice, contact HR One.
We can connect you directly with the team at Advanced Business Consulting to explore available options and determine whether this type of strategy may make sense for your organization.
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