Healthcare costs are rising and they are hitting small businesses hard. U.S. employers expect a 5.8% increase in 2025, and small businesses face nearly 9% hikes without cost controls.
This trend makes it clear why healthcare costs are a top concern for businesses heading into 2026. But here’s the good news: you don’t have to choose between financial stability and a competitive benefits package.
We’ve partnered with the experts at OneDigital to help. We’ve dug into their 2025 Small Business Cost Containment Playbook, added our own insights, and pulled out the top takeaways to give you actionable strategies for managing costs without sacrificing the employee experience.
1. Data, Not Guesswork: Use Benchmarking to Find the Right Fit
One of the easiest ways to overspend on benefits? Not knowing what others in your market are offering. Many small businesses fall into the trap of “offering what we’ve always offered,” even if it’s no longer competitive or cost-effective.
What you can do:
Request a market benchmarking analysis through your broker or PEO. Compare your current plan design, contribution strategy, and participation rates with similarly sized companies in your industry. Even slight adjustments to premium splits or plan tiers can deliver meaningful savings.
2. Rethink Plan Design: It’s Not About Cutting, It’s About Customizing
Contrary to popular belief, cost containment doesn’t mean offering “less.” It means offering smarter.
OneDigital recommends:
- Offering tiered plan options (e.g., a base plan plus a buy-up option)
- Increasing out-of-pocket maximums on higher-tier plans while reducing employer contribution on those plans
- Incorporating narrow or high-performance networks to lower premiums
At Focus HR, we often see success when employers let employees choose what works for their families and their budget.
3. Educate to Empower: Increase Utilization of Low-Cost or No-Cost Resources
Many employers offer great benefits their employees simply don’t use—because they don’t understand them. This underutilization leads to low perceived value and unnecessary spending.
Tactics to try:
- Run a simple open enrollment campaign explaining benefits with plain language
- Highlight low-cost virtual care options like telehealth or EAP services
- Use surveys to identify which benefits employees want more information about
OneDigital reports that employers who educate employees on benefit options typically see up to 20% higher satisfaction and more efficient benefit use.
4. Don’t Forget About Pharmacy Spend
Prescription drug costs now account for up to 25% of total health plan costs, and they’re rising fast. Luckily, this is also one of the most controllable expenses with the right strategy.
Consider:
- Switching to a pharmacy benefit manager (PBM) with better transparency and rebate strategies
- Encouraging generic or formulary adherence through your health plan or provider education
- Evaluating carve-out pharmacy options
At Focus HR, we’re seeing a growing number of clients turn to alternative funding models or cooperative purchasing to rein in pharmacy costs.
5. Wellness Works—If You Target the Right Outcomes
Wellness is no longer about yoga and fruit bowls in the breakroom. In 2025, it’s about proactive risk management. Focus on wellness programs that drive measurable impact, such as:
- Reducing preventable ER visits
- Improving chronic condition management (diabetes, hypertension)
- Promoting mental health and stress management resources
OneDigital notes that targeted wellness initiatives tied to claims data can reduce long-term healthcare costs by 10-20%.
6. Work with an HR Partner Who Knows Small Business
This year more than ever, small businesses can’t afford bloated benefits or disengaged employees. At Focus HR, we help you analyze your current costs, forecast future risk, and create a plan that aligns with your business goals.
Our approach:
- We benchmark your benefits
- We optimize plan design and education
- We act as your outsourced HR partner, delivering strategic support and cost control
- We help with the administrative side of offering employee benefits like tracking eligibility, open enrollment, qualifying event changes or claims administration.
Need help cutting costs without cutting corners? Let’s talk.
Containment Without Compromise
Cost containment isn’t about offering less, it’s about designing benefits that deliver more value for every dollar spent. With the right HR partner and a data-informed strategy, small businesses can protect their bottom line while still supporting their people.
Read the full playbook from OneDigital here:
Small Business Cost Containment Playbook (PDF)
