Nearly 153 million Americans, which is to say, close to half, get their health insurance through an employer. Maybe it’s their own, maybe their spouse’s, and if you’re 26 or under, maybe their parents’. And that insurance is getting more expensive. According to a survey out today from KFF, annual family premiums for employer coverage went up an average of 7% this year, to around $24,000. Workers do pay a chunk of that, but the bulk of the rising cost is paid by the employer. 

They’re dealing with those costs at West Plains Veterinary Supply in Springfield, Missouri, where they sell things like dog food, gloves for beekeepers and formula for baby goats. 

“Everything that goes on or in an animal,” said Joseph Babbitt, an accountant with the company. He noted that he counts beans, which includes the extra dollars going towards health insurance for the company’s 50-odd employees. 

He said their premiums have risen dramatically over the years, and went up over 20% in 2023, an increase the company covered. To offset these changing costs, they’ve had to make other adjustments. It used to be that their plans covered all expenses once employees paid their deductible. 

Moving forward, “Once you meet your deductible, then you have to pay 20% on top of that,” said Babbit. “Then we’ll have to do it again, probably, next year.”

Employers everywhere are facing these kinds of decisions. Matthew Rae of KFF, one of the authors of the new report, listed some other options. 

“You can get rid of high cost providers, which isn’t always popular. Or you can reduce the number of covered services and just make the benefits less generous,” he said. 

Another possibility? Try to offer generous benefits to a smaller staff. Robert Thompson leads Angevin & Co, a restaurant and hospitality group. He’s planning to open several venues next year that provide what he calls “eatertainment.” For example, play pickleball and eat a burger (that, yes, might have pickles on it).

Thompson said that as a result of rising labor costs, including health care, he’s eliminated bartenders in some venues, and has customers pour their own beer and wine. 

“That allows us to, at the end of the day, hire fewer employees,” he said. 

Thompson said that means the workers they do hire will get better benefits, which gives him a competitive advantage in a tight labor market. 

Meanwhile, Joseph Babbitt, of the veterinary supply company said it’s essential for employers to have a robust health plan.

“We’ve always done it. And I just think it’s what good companies do,” he said. 

Because, he said, they want healthy employees.