Open enrollment is an important opportunity for employers to review their employee benefits programs, manage expenses, and help employees choose coverage that fits their needs. But as healthcare costs continue to rise, businesses face a growing challenge: maintaining valuable benefits while keeping costs manageable.
According to a September 2026 SHRM pulse survey, 57% of HR professionals identified controlling benefits costs as their top open enrollment priority, while 24% prioritized improving benefits education. These findings highlight the need for employers to balance financial considerations with clear communication and employee support.
For businesses preparing for the 2027 benefits year, a thoughtful open enrollment strategy can help employees understand their options while allowing employers to make informed decisions about their benefits investments.
Why Managing Benefits Costs Is a Growing Priority
Healthcare expenses affect both employers and employees. Businesses must consider the cost of providing coverage, while employees may face higher premiums, deductibles, copayments, and other out-of-pocket expenses.
SHRM reports that employer healthcare costs are projected to increase by 9.5% in 2027, with average spending exceeding $19,000 per employee, based on data from consulting firm.
Rising expenses can place pressure on company budgets and make it more difficult to maintain competitive benefits packages. However, reducing costs without considering employee needs can also create challenges, including dissatisfaction, confusion, and difficulty accessing appropriate care.
The goal is to find a sustainable balance between affordability, coverage quality, and employee well-being.
5 Strategies to Manage Employee Benefits Costs During Open Enrollment
1. Review Your Current Benefits Package
Before making changes, employers should evaluate their existing benefits plans and determine whether they continue to meet the needs of the organization and its employees.
Review premium costs, plan utilization, employee contributions, deductibles, and available coverage options. Working with a benefits advisor can help employers compare alternatives and identify opportunities to improve value.
A regular benefits review can also help businesses understand which offerings employees value most and where adjustments may be appropriate.
2. Communicate Benefits Changes Clearly
When premiums, employee contributions, or coverage options change, employees need to understand what those changes mean for them.
Clear communication should explain:
- What is changing in the upcoming plan year.
- How much employees will contribute toward their coverage.
- What the employer continues to contribute.
- How deductibles, copayments, and out-of-pocket maximums work.
- When employees must complete their enrollment elections.
Transparency helps employees evaluate their options and understand the reasons behind benefits changes. Employers should communicate early and provide opportunities for employees to ask questions.
3. Improve Employee Benefits Education
Offering multiple plans is only helpful when employees understand how those plans work.
Some employees may focus primarily on monthly premiums without considering deductibles, provider networks, prescription coverage, or expected healthcare needs. Others may not understand preventive care benefits or how to find the appropriate level of care.
Employers can make benefits education more effective through informational sessions, comparison guides, FAQs, one-on-one support, and reminders throughout the enrollment period.
The objective is to help employees make informed choices rather than simply select the plan with the lowest upfront cost.
4. Explore Cost-Effective Benefits Options
Employers can explore different plan designs and benefits strategies to identify options that align with their budgets and workforce needs.
Depending on the business and its eligibility, these may include reviewing high-deductible health plans paired with Health Savings Accounts (HSAs), evaluating prescription drug benefit arrangements, comparing carrier networks, or assessing employer-sponsored reimbursement arrangements such as Individual Coverage Health Reimbursement Arrangements (ICHRAs).
Each option has different eligibility rules, administrative requirements, tax implications, and potential trade-offs. Employers should review these details carefully before making changes.
Cost management should focus on the overall value of a benefits program, not just the lowest premium.
5. Help Employees Understand How to Use Their Benefits
Benefits education should continue after employees select their plans.
Employers can share information about in-network providers, preventive services, prescription benefits, telehealth options, and available employee assistance resources.
Helping employees understand where to find care and how their coverage works may support more informed healthcare decisions and help them avoid unexpected expenses.
Consistent communication throughout the year can also reduce confusion and help employees get more value from the benefits available to them.
Balancing Business Costs With Employee Satisfaction
Managing benefits expenses is important, but the employee experience should remain part of every decision.
Significant changes to premiums or coverage can affect employees’ household budgets and their perception of the overall compensation package. Employers should consider these impacts before implementing changes and provide clear explanations of available options.
A balanced approach includes evaluating financial sustainability, understanding employee needs, communicating transparently, and reviewing the effectiveness of benefits offerings over time.
When employees understand their coverage and the value their employer provides, they are better positioned to make decisions that support their individual circumstances.
Start Planning for a More Effective Open Enrollment
Open enrollment should be more than an annual administrative task. It is an opportunity for employers to reassess their benefits strategy, communicate with employees, and prepare for changing healthcare costs.
By reviewing current plans, improving benefits education, exploring appropriate cost-management strategies, and maintaining transparent communication, businesses can work toward a benefits program that supports both organizational goals and employee needs.
Planning early can give employers more time to evaluate their options, prepare enrollment materials, and help employees understand any upcoming changes.
How Cosmo Insurance Agency Can Help
At Cosmo Insurance Agency, we understand the importance of building an employee benefits strategy that considers both business budgets and employee needs.
Our team can help businesses review available insurance options, compare plan structures, and better understand the considerations involved in managing employee benefits costs.
Whether you’re preparing for open enrollment or reviewing your current health insurance offerings, having the right guidance can help you make more informed decisions for your organization.
Ready to review your employee benefits strategy for 2027? Contact Cosmo Insurance Agency to discuss your options and prepare for the upcoming enrollment season.
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