Rising Health Care Costs Pose New Challenges for U.S. Employers Like EnerSys

Healthcare Provider Update: Healthcare Provider for EnerSys: EnerSys, a global leader in stored energy solutions, typically utilizes various healthcare providers for its employee benefits. However, the specific healthcare provider used by EnerSys can vary by location and is often tailored to meet the needs of its workforce and regional healthcare systems. For the most accurate and updated information, it's advisable for employees or interested parties to refer to EnerSys' human resources or benefits department. Potential Healthcare Cost Increases in 2026: As healthcare costs rise significantly, the landscape for employers and employees is expected to shift dramatically in 2026. Various insurers are predicting increases in premiums often exceeding 20%, driven by factors such as higher medical costs, potential expiration of federal premium subsidies, and significant rate hikes from the largest insurers. With market conditions suggesting that over 22 million individuals may face out-of-pocket premium hikes exceeding 75%, the financial strain on many families and businesses is imminent, necessitating strategic planning among employers to mitigate these impacts. Click here to learn more

'Rising health care costs are no longer a temporary trend but a structural challenge that employers like EnerSys need to face head-on. Proactive planning around benefits and long-term budgeting is essential to maintaining both workforce stability and financial resilience.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'With health care costs on the rise, companies like EnerSys are exploring ways to align benefit strategies with financial objectives to help preserve both employee well-being and organizational strength.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. The rapid rise in employer-sponsored health care costs and its long-term budget implications.

2. The primary factors driving health care inflation, including labor shortages and prescription drug costs.

3. The strategic responses employers are adopting to manage expenses while addressing employee well-being.

By Patrick Ray, a financial advisor at Wealth Enhancement

Businesses in the United States, including EnerSys, are bracing for the largest increase in health insurance costs in over 15 years. ¹  This trend is spilling over into the operating costs associated with employer-sponsored health care plans, driving companies to revisit how they handle employee benefits, retention, and long-term financial planning.

An Increase in Prices

Industry estimates indicate that employer health care expenditures are set to rise by roughly 9% to 10% in 2026, ²  marking the biggest annual jump since 2011. ³  With average annual premiums for employer-sponsored family coverage reaching $25,572 in 2024, ⁴  this jump stands to put continued pressure on companies—including EnerSys—to reassess how sustainable their benefit programs remain. The compounding effect of these annual increases has forced firms to rethink benefits in ways that may directly influence workforce stability.

Double-digit annual increases do occur in exceptional circumstances, but the fact that this surge is happening in a stable economy underscores how health care inflation has shifted from a temporary market disruption to a structural challenge for employers.

The Reasons Behind Rising Prices

Several systemic factors are fueling this upward trend for employers like EnerSys:

• Health Care Labor Costs:  Hospitals and providers are facing heightened labor expenses, especially for specialized roles such as nurses and clinicians. ⁵

• Pharmaceutical Expenses:  The introduction of new and specialty treatments—often expensive—adds strain to budgets.

• Insurer Pass-Throughs:  Increases in insurer rates are often passed directly on to employer-sponsored plans. ⁶

• Increased Utilization:  Following the pandemic, many employees deferred screenings and elective procedures, leading to a surge in catch-up care that elevates overall spending. ¹

While these developments may lead to better health outcomes over time, they also impose immediate budget pressures.

The Employer’s Dilemma

Spending trends are approaching a tipping point for many organizations such as EnerSys. One Wealth Enhancement client with over 2,000 employees projected employer-sponsored health care costs could exceed $50 million within three years, a scenario the CFO described as “unsustainable.” Employers now face the choice of absorbing greater expenses, scaling back benefits, or shifting more costs onto employees. Each route carries risks, particularly if health care cost growth continues outpacing revenue and wage increases.

Effects on Employees

At large corporations like EnerSys, employees may experience higher deductibles, copays, or out-of-pocket maximums—even when employers cover most premium increases. For many families, coverage costs now rival second mortgages or car payments, fueling dissatisfaction and turnover. As benefits grow more costly and are viewed as less generous, workforce morale and retention suffer, impacting engagement and company performance.

Employers’ Strategic Responses

To address rising costs, companies—including EnerSys—are turning to tactics such as:

• Health Savings Accounts (HSAs) and High-Deductible Plans:  To mitigate costs for employees enrolled in high-deductible health plans, some employers are including HSAs in their benefits programs. These accounts offer a triple tax advantage: contributions to the account are tax-free and exempt from Social Security or Medicare taxes if they're made through payroll deductions; the money invested grows tax-free; and withdrawals for qualified health expenses are tax-free.

• Direct Provider Negotiations:  Some employers aim to leverage their market power by negotiating health care costs directly with providers, bypassing traditional insurance networks and optimally reducing both employer and employee health care coverage costs.

• Virtual Care and Digital Solutions:  By expanding access to telemedicine and wellness technology, some employers hope to reduce reliance on costly in-person services.

These measures reflect innovation but deliver incremental relief—not full-scale solutions.

The Long-Term Financial Landscape

For EnerSys and other large employers, the question isn't whether health care costs will rise—it's how to prepare for the continuing upward trend. Some firms have created dedicated reserve funds to buffer volatility; others link executive incentives to cost containment efforts. These strategies favor proactive planning, aligning financial discipline with long-term performance.

The Human Factor

Health care spending isn't merely an expense; for companies like EnerSys, maintaining a healthy, engaged workforce is essential to productivity and loyalty. Overly aggressive cost trimming may produce short-term savings but often leads to higher absenteeism and turnover, eroding future competitiveness. Organizations that approach health care as an investment in human capital may be better placed to balance budget priorities with workforce resilience.

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Final Thoughts

Health care costs in the U.S. are forecast to rise at levels not seen in more than a decade, with employer-sponsored coverage poised for the steepest annual increase since 2011. EnerSys and other employers must weigh fiscal responsibility against supporting employee well-being—a balance vital to long-term viability.

Wealth Enhancement advocates crafting strategies that help preserve competitiveness while supporting employees’ health. A 65-year-old retiring in 2025 may need as much as $172,500 to cover health care expenses in retirement—up nearly 4% from the previous year ⁷ —highlighting how health care inflation deeply affects future financial commitments.

Employers’ rising health care costs resemble a rising tide: gradual increases may go unnoticed at first, but soon every anchored vessel—every business—is impacted. EnerSys and others must consistently adapt benefits design to meet this challenge, maintaining workforce engagement and long-term financial strength.

Sources:

1.  Mercer. ' Employers prepare for the highest health benefit cost increase in 15 years ,' by Beth Umland and Sunit Patel. September 3, 2025. 

2. Aon. ' U.S. Employer Health Care Costs Expected to Rise 9.5 Percent In 2026 ,' September 10, 2025. 

3.  PwC Health Research Institute. ' Medical Cost Trend: Behind the Numbers 2026 ,' 16 July 2025.

4. KFF. ' 2024 E mployer Health Benefits Survey ,' October 9, 2024.

5.  American Hospital Association. ' America’s Hospitals and Health Systems Continue to Face Escalating Operational Costs and Economic Pressures ,' Apr. 2024.

6. Health Services Research. ' Research and policy to strengthen the employer-sponsored health insurance market ,' April 25, 2022.

7.  Fidelity Investments. “ How to Plan for Rising Health Care Costs ,” September 5, 2025.