By Chris Timol, President & COO, PuzzleHR
A few weeks ago, I found myself in back-to-back conversations with business owners, HR leaders, insurance agents, and CFOs. Different companies. Different industries. Same conversation.
Health insurance costs are out of control. The renewals are brutal. The options feel worse every year. And nobody seems to have a real answer.
Spend some time reading a few Reddit threads from business owners trying to figure out what to do and you’ll see the same thing. It’s beyond frustration. It seems like desperation.
If you know me you know, I’ve been in the HR business long enough to know when a problem is getting worse instead of better. This one is getting worse.
The numbers are real
Family health coverage now averages $26,993 per year, according to the Kaiser Family Foundation. That’s up 6% from last year. Wages grew 4%. Inflation ran 2.7%. Premiums beat them both.
For 2026, employers are projecting a 10% jump in health care costs, per SHRM. Mercer puts the average per-employee cost at over $18,500. For small businesses, the projected increase is 11%.
This isn’t a blip. It’s been compounding for two decades. Small group premiums are up 120% over 20 years.
It gets more unsettling when you look at what large companies are doing. Deloitte recently cut PTO by five to ten days, halved parental leave from 16 to 8 weeks, and eliminated a $50,000 IVF benefit. These are not struggling companies making emergency cuts. They’re doing the math and deciding something has to give.
59% of employers are making cost-cutting changes to their health plans in 2026. That’s up from 44% in 2024 and I’m surprised it’s that low.
Why the standard playbook doesn’t work
Every year, most companies go through the same renewal cycle. The broker presents options. The options are: raise the deductible, decrease the benefits, shift more premium to employees, or switch carriers and hope the number comes down.
Talk about kicking the can down the road. . .those aren’t solutions. They’re deferrals. You push cost to employees, benefits erode, and you come back the following year with the same problem plus compounded resentment from your workforce.
Benefits are compensation. When you quietly cut them, people notice.
What most companies haven’t tried
PuzzleCares is a supplemental benefits program that runs alongside a company’s existing major medical plan. It covers what employees actually use most: urgent care, telehealth, and generic prescriptions.
When employees handle those needs through PuzzleCares, those visits don’t file as claims against major medical. Fewer claims mean a better utilization trend. A better trend means a smaller rate increase at renewal. The cost spiral starts moving the other direction.
It also runs through a Section 125 cafeteria plan. Employee contributions come out pre-tax. That means less FICA for both sides. Employers save 7.65 cents on every dollar employees contribute through the plan. Employees save that plus FWT on those dollars, increasing their take home pay.
What it looks like in practice
PuzzleHR has 200 employees. 152 are enrolled in PuzzleCares. As a company, we save $9,000 a month in payroll taxes. Those are real dollars that we can spend to decrease our employees’ contribution to our major medical, a 401k match and so on. Our employees average $50 to $60 more per month in take-home pay because of the pre-tax structure.
My daughter used it recently. She needed a telehealth visit and left with a prescription. She paid nothing for either. Without PuzzleCares, she would have paid $90 for the visit and $10 for the medication. Her only errand was picking it up.
One of our clients is a large QSR franchise. Before PuzzleCares, most of their hourly employees had no employer-sponsored benefit at all. Today, the company saves over $400,000 a year. Their employees, many of whom had never had a workplace benefit in their lives, now have one.
That second part matters. For certain workforces, this isn’t just a cost management tool. It’s the only way a benefit happens.
Why you probably haven’t heard about this
Most traditional brokers don’t sell supplemental benefit programs like PuzzleCares. Some of that is structural. Programs like this require additional service infrastructure to manage. It’s more complex than placing a major medical policy.
That’s a solvable problem. PuzzleHR handles the administration. Brokers can bring PuzzleCares in alongside their existing offerings without taking on service complexity they don’t have capacity for.
If you’re heading into a renewal with a double-digit increase on the table and your broker’s options are the same three they presented last year, it’s worth asking whether there’s a different conversation to be having.
The bottom line
The health insurance cost problem is real and it’s accelerating. Raising deductibles and shifting premium to employees delays the pain but doesn’t fix it.
PuzzleCares isn’t a replacement for major medical. It’s a smarter layer on top of it that reduces claims, captures tax savings most companies are leaving behind, and in some cases makes benefits possible for workers who otherwise wouldn’t have them.
If you want to talk through whether it makes sense for your company, I’m happy to get into the numbers.
-Timol
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DISCLOSURE
PuzzleCares is an insurance product offered through Puzzle Insurance Solutions, a licensed insurance entity. This article is intended for informational purposes only and does not constitute an offer or solicitation to purchase insurance. Coverage, availability, plan design, and eligibility may vary by state and employer. Section 125 tax savings are illustrative and will vary based on individual circumstances, plan design, participation rates, and applicable federal and state tax law. Employers and employees should consult a qualified tax advisor, benefits consultant, or legal counsel before making benefits or tax decisions. PuzzleHR and Puzzle Insurance Solutions are separate entities.
