Rising claims costs are one of the biggest pressures on employer-sponsored health plans, and companies often react to increases only at renewal. A data-driven benefits strategy takes a different approach by analyzing claims data throughout the year to identify cost drivers, high-utilization patterns, and preventable conditions before they inflate premiums.
Benefits consulting firms use this information to help their clients with pre-renewal planning. For health plans, this means recommending targeted interventions that steer employees toward lower-cost, higher-quality care.
Why Cost Shifting Runs Out of Room
Mercer projects that total health benefit cost per employee will pass $18,500 in 2026, a 6.7% rise year-over-year, and the steepest increase in 15 years. The Kaiser Family Foundation (KFF) put the average annual family premium at $26,993 for 2025, up 6% in a year when general inflation ran 2.7% and wages grew by about 4%.
Employer health spending is more concentrated than many budget conversations assume. The Employee Benefit Research Institute (EBRI) looked at 13.1 million people enrolled in group plans and found the top 1% of spenders accounted for 29% of total spending. The top 5% accounted for 57%. Average annual spend inside that top 1% ran roughly $206,000.
Raising the deductible by $500 barely affects those costs. A member on a specialty infusion, for example, or someone recovering from a cardiac event, can hit the out-of-pocket maximum in weeks, and every dollar after that belongs to the plan.
Cost sharing tends to change behavior in the middle of the distribution, where spending is modest to begin with. Employees may pay more while the plan saves very little and the claims actually driving your renewal go untouched.
EBRI’s work on persistency in high-cost claims shows that, across a five-year window, only about 2% of enrollees stayed in the top 10% of spenders every single year, and that small group drove 19% of spending in the final year studied.
Most high-cost claims don’t repeat. A premature birth or an accident inflates claims one year and disappears. But a member with hard-to-control diabetes and hypertension turns up every year. These claims may carry the same dollar figure, but need different approaches.
What Your Claims Data Should Be Telling You
Under the Consolidated Appropriations Act, 2021, group health plans can’t enter into agreements with carriers, third-party administrators (TPAs), or provider networks that restrict access to cost and quality of care information.
Plan sponsors also file a gag clause prohibition compliance attestation, a mandatory annual report showing that a health insurance plan doesn’t hide healthcare costs or quality data, with the Centers for Medicare and Medicaid Services (CMS) by December 31 each year.
This means that, in reviewing claims data, you can ask your carrier or TPA for more than a paid claims summary. Instead, ask for:
- Spend broken out by diagnostic category
- Pharmacy cost split between traditional and specialty drugs
- Out-of-network use priced against comparable in-network care
- Emergency room visits that could have been handled in urgent care or a virtual setting
- Large claimant reporting at a dollar threshold that fits the size of your enrolled population
For a self-funded employer, ERISA (Employee Retirement Income Security Act) fiduciary duties attach to plan decisions, and to decide if plan spending is reasonable, you need to be able to see where it goes.
While specific fiduciary questions belong with legal counsel, the data request itself is a straightforward one to make.
The Cost Levers Worth Modeling Before the Next Renewal
Mercer’s November 2025 reporting found prescription drug spending up 9.4% on average among large employers. Now, 49% cover GLP-1 medications for weight loss, up from 44% the prior year. KFF’s October 2025 report found that 59% of the largest employers offering those drugs said utilization ran higher than they expected.
A pharmacy benefit review can look at formulary placement, how rebates flow back to the plan, whether specialty drugs get billed under the medical or the pharmacy benefit, and how your pharmacy benefit manager (PBM) contract defines “specialty.” That definition tends to widen over time, and your effective cost climbs with it.
Chronic condition management is integral to managing the cost of persistency. Among enrollees who stayed high-cost year after year in the EBRI data, one-third had diabetes, 51% of whom also had hypertension.
Mercer reported that 35% of large employers offered at least one plan that steered members toward smaller networks of higher-performing providers, while KFF found only 15% of covered workers are enrolled in a high-performance or tiered network. Pricing plans thoughtfully can better control that. If the steered option isn’t the default and the payroll deduction difference is a few dollars a paycheck, enrollment may stay flat, and the savings never arrive.
Making the Financial Case Over Three to Five Years
Mercer found that 77% of large employers named measuring health program performance a priority for the next three to five years, which is roughly the horizon these decisions require.
If the 6.7% cost increase found by Mercer holds up, then $18,500 per employee compounds past $25,500 in five years. To beat that curve, you’ll need to set a baseline before anything launches, interim measures that are informed by more than total claims, and a broker who brings you analysis between renewals.
Bring Your Claims Data Into the Conversation Earlier
Business Benefits Group has spent nearly 30 years helping employers read their claims data and turn it into long-term strategies. Our six-step process opens with education and an assessment of how your current program is performing and how your workforce actually uses it, then builds a three- to five-year roadmap around what the data shows.
If your renewal is approaching and you haven’t seen utilization reporting beyond a paid claims summary, let’s review what your plan is telling you before the quote arrives.