How companies and employees can reduce healthcare costs

Written by: Gabrielle Smith
Published on January 19, 2022.

According to a survey conducted by the Employee Benefit Research Institute, a third of U.S. employees have seen an increase in their health costs in the last year. What’s more, 4 in 10 of those who reported increased health costs said they also have trouble paying their bills or covering basic living expenses.

But employees aren’t the only ones struggling to pay for healthcare costs these days—employers are bearing the brunt of rising costs as well. A survey of large employers from the Kaiser Family Foundation found that 96% of respondents agree that the high costs of offering healthcare to their employees is excessive.

So as an employer, how do you balance your own benefits budget while still offering an affordable plan that your employees can benefit from? And as an employee, how can you make the most of your benefits to lower your healthcare costs?

In this article, we’ll go over tips for both employers and employees to help lower costs without sacrificing coverage.

Jump to a specific section here:

Tips for employers:

Tips for employees:

Tips for employers

Supplement your group plan with a group coverage HRA

One strategy employers can implement is to add a high deductible health plan (HDHP) to your group plan offerings, and supplement it with a group coverage HRA (GCHRA). This may be a good option for your younger and healthier employees who don’t have as many healthcare costs, and it in turn lowers the premium for both you and them.

If you’re worried about the high deductible employees will have to meet, you can offer a GCHRA to help offset the out-of-pocket costs. With a GCHRA, you simply offer a tax-free allowance of money for your employees to spend on the healthcare expenses they incur before they meet their deductible, or for items that aren't fully covered by the group plan.

New to the GCHRA? Get our one-page guide for a quick overview

Drop your under-utilized benefits

Another option is to eliminate the benefits you’re spending money on but your employees aren’t cashing in on. For example, if you offer a monthly gym membership stipend but none of your employees have signed up, you can drop the benefit and spend those dollars in other places.

A great way to learn which of your benefits your employees are and aren’t using is by sending out an employee benefits survey. Our template has free sample questions you can use!

Foster a healthy workforce

Lastly, another way to help save on health benefits costs for both you and your employees is by fostering a healthy workforce. After all, the healthier your employees are, the less likely they are to have extensive healthcare costs.

One way to do this is by offering wellness stipends toward gym memberships, wellness apps, and other expenses that encourage your employees to stay healthy. A health stipend works in a similar way to a GCHRA, but the amount is subject to income taxes for both you and your employees.

Learn more about offering health and wellness stipends

Tips for employees

Educate yourself on your benefits

The first step to lowering your healthcare costs as an employee is to make sure you’re fully utilizing all of your employee health benefits. More importantly, you’ll want to make sure you understand how they work so you can make the most of them.

For example, if your employer offers a health reimbursement arrangement (HRA), you can get reimbursed, tax-free, for your individual health insurance premium and potentially other qualified healthcare expenses.

Reach out to your HR representative or benefits administrator to make sure you’re taking advantage of everything you qualify for as an employee.

Negotiate your medical bills

Another little-known tip about lowering your healthcare costs is negotiating your medical bills. A lot of Americans don’t realize that there are several very useful tips to lower your medical bills, get financial assistance, and even negotiate a more reasonable payment plan with your healthcare provider.

We’ve got all the tips you need to know in our article

Take care of your health

Lastly, one of the simplest things you can do to lower your healthcare costs is to take care of your health. The healthier you are, the less trips you’ll need to make to the doctor and other expensive specialists.

While easier said than done, making simple changes like switching to flavored water instead of sugary drinks or going for a walk on your lunch break instead of watching TV can make a big difference in your health.


While healthcare costs are steadily rising for both employers and employees, there are several smart ways you can lower your costs and stretch your dollar when it comes to your health. While it may be tempting to simply skip a doctor’s visit or lower your benefit offerings, it doesn’t have to be that way. By following the tips in this article, you’ll be able to get the coverage you need without compromising valuable coverage.

Originally published on January 19, 2022. Last updated January 19, 2022.


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