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Healthcare costs are climbing — and both employees and employers are feeling the pressure.
In 2024, the average premium for employer-sponsored plans hit nearly $9,000 for individuals and more than $25,000 for families. To make matters worse, nearly half of U.S. adults say they struggle to afford healthcare.
For employers, this presents a challenge: balancing rising costs with the responsibility to offer meaningful, accessible benefits for employees.
The good news? There are smart, strategic ways to do both.
In this article, we’re exploring practical, proactive steps employers and employees can take to cut healthcare costs without compromising quality of care or employee well-being.
How Employers Can Cut Healthcare Costs
Employers don’t have to choose between cutting healthcare expenses and providing meaningful benefits. Innovative approaches can keep benefits packages valuable for employees and balance spending for employers who provide the plans.
Offer smarter health plans.
Despite advancements across the healthcare industry, many health plans still fall short, leaving employees confused, underinsured, or simply unaware of how to get the most from their benefits. This disconnect not only impacts employee satisfaction but also drives up costs for employers.
A smarter approach starts with offering plans that are both value-based and cost-efficient.
Value-based models that prioritize outcomes over volume are a popular alternative to outdated fee-for-service options. These plans leverage data-driven insights and proactive care management to reduce unnecessary spending while improving overall health outcomes.
Cost-efficient plans help reduce fraud, waste, and abuse through strategies such as:
- Stop-loss coverage to manage large claims
- Plan designs that encourage the use of low- or no-cost options
- Navigation tools guiding members toward high-value providers
- Payment integrity solutions to review claims before, during, and after payment to catch errors, overcharges, and unnecessary services
The result is smarter spending, fewer surprises, and stronger financial sustainability.
Make costs transparent.
For employees to make confident, informed decisions about their healthcare, they need clear, accessible information — especially when it comes to cost and quality. Healthcare pricing can often feel like a mystery, leaving employees unsure of what they’ll owe or how to evaluate their options. That uncertainty can lead to delayed care, unnecessary spending, or poor health outcomes.
Employers can offer cost comparison and healthcare navigation tools to help change that. These can help employees weigh their options, understand provider quality, and maximize their benefits. When everything employees need is available in one place and presented in clear, plain language, it empowers them to seek care when they need it without fear of surprise bills or confusion.
Recent regulatory changes are also pushing price transparency forward. A 2025 executive order reaffirms a federal commitment to enforcing price transparency regulations established under the Transparency in Coverage rule and the No Surprises Act. While the order doesn’t introduce new requirements, it does direct organizations to prioritize the enforcement of these older regulations — indicating a renewed focus on transparency compliance for healthcare organizations.
Transparent pricing helps employers build more cost-effective health plans and ensures employees use their benefits as intended.
Support healthcare literacy.
Making healthcare more affordable starts with helping employees make smarter decisions about how and where they seek care. Many employees don’t realize how much costs can vary depending on the type of service, provider, or prescription. And without the right guidance, they may choose expensive options when more affordable, high-value alternatives are available.
Employers can make a big impact by offering cost-effective care options, such as telemedicine, in-network providers, and generic prescriptions. These choices not only lower out-of-pocket costs for employees but also reduce plan expenses for employers.
Healthcare navigation tools that guide employees toward high-value providers can also improve healthcare literacy. These tools take the guesswork out of decision-making, helping employees feel more confident about their choices while reducing unnecessary costs.
By supporting healthcare literacy, employers can support better health outcomes, reduce waste, and improve employee satisfaction with their benefits.
Invest in wellness.
Employers can support their workforce’s health (and, in turn, further reduce healthcare costs) by investing in their employees’ wellness. When companies invest in preventive care, mental health resources, and fitness incentives, they’re actively helping employees avoid chronic conditions, reduce stress, and live a healthier lifestyle.
Preventive screenings and routine checkups can help catch issues early before they become more serious and costly. Meanwhile, programs that promote physical activity or offer rewards for healthy behaviors can increase engagement and foster a culture of well-being.
The results? Lower absenteeism, higher productivity, and reduced healthcare costs over time.
Reward healthy choices.
When employers reward healthy behaviors, such as choosing a high-value provider, they empower employees to take a more active role in their health. Premium discounts, wellness perks, and incentive programs make benefits feel more valuable and reinforce a culture of care.
Member engagement tools and rewards platforms can help track participation and celebrate progress, keeping employees motivated. By recognizing and rewarding smart healthcare choices, employers can boost engagement, improve outcomes, and lower healthcare costs.
How Employees Can Take Control of Healthcare Spending
In 2025, healthcare costs are expected to rise to their highest level in 13 years, with research projecting an 8% increase in the group market and a 7.5% increase in the individual market.
To take control of spending and cut healthcare costs, employees can implement the following strategies.
Be a smart healthcare shopper.
One of the most effective ways employees can reduce healthcare costs is by shopping around.
Not all providers charge the same for the same service. Without easy access to cost and quality information, many employees don’t realize that lower-cost, high-quality options are available — or that some services may even be offered at no cost through their plan.
Encouraging employees to compare providers empowers them to make smarter choices, avoid unnecessary expenses, and get the most out of their benefits. Tools such as NaVcare enhanced with Care Value Optimizer from Vālenz Health® make that process easier by guiding employees toward in-network, high-value care based on both quality and affordability.
With the help of care navigators, employees are matched to the best available care based on income, location, and healthcare needs, from no-cost charity care to high-value Centers of Excellence. This tailored guidance improves outcomes and ensures high-value care. Care navigators can also help with questions about benefits and out-of-pocket expenses, helping employees understand their benefits and use them wisely.
Choosing the right care setting is also an essential part of controlling spending. For nonemergency care (such as minor cuts, allergies, earaches, and other non-life-threatening issues), urgent care, telehealth, or a primary care physician can be much more affordable than an emergency room visit. Additionally, telehealth options are often low-cost — or even free — under many plans.
Employees can utilize their health savings accounts or flexible spending accounts and ask about lower-cost pharmacy alternatives for prescriptions to stretch their dollars further.
Prioritize preventive care.
Preventive care is one of the most effective ways to avoid higher healthcare costs in the future. Regular checkups with a primary care provider can catch chronic conditions, high cholesterol, high blood pressure, diabetes, and other health problems early on before they require costly specialist visits or emergency care.
Take the Next Step Toward Managing Healthcare Costs
Healthcare costs aren’t subsiding anytime soon, but that doesn’t mean that employers and employees are powerless. With the right tools and strategies, organizations can make meaningful changes that control costs while ensuring employees have what they need to live strong, vigorous, and healthy lives.
Explore our suite of healthcare solutions and connect with Valenz to learn how you can better support your employees today.