New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Rising Health Care Costs Pose New Challenges for U.S. Employers Like Southwest Gas Holdings

Healthcare Provider Update: Healthcare Provider for Southwest Gas Holdings Southwest Gas Holdings provides healthcare benefits through a variety of insurers, primarily utilizing Aetna for their healthcare plans. This partnership enables employees to access a broad network of healthcare services. Expected Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are anticipated to soar, significantly impacting those affiliated with Southwest Gas Holdings. This expected surge stems from factors such as the expiration of enhanced federal subsidies for Affordable Care Act (ACA) plans, which could lead to a staggering increase of over 75% in out-of-pocket premiums for many enrollees. Moreover, aggressive rate hikes from major insurers, combined with rising medical costs, suggest that employees and retirees may face a challenging financial landscape in the coming year. Proactive management of health benefits and planning will be crucial for individuals navigating these increasing costs. Click here to learn more

'Rising health care costs are no longer a temporary trend but a structural challenge that employers like Southwest Gas Holdings 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 Southwest Gas Holdings 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:

The rapid rise in employer-sponsored health care costs and its long-term budget implications.
The primary factors driving health care inflation, including labor shortages and prescription drug costs.
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 Southwest Gas Holdings, 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 Southwest Gas Holdings—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 Southwest Gas Holdings:

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 Southwest Gas Holdings. 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 Southwest Gas Holdings, 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 Southwest Gas Holdings—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 Southwest Gas Holdings 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 Southwest Gas Holdings, 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. Southwest Gas Holdings 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. Southwest Gas Holdings 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.

How does the Southwest Carpenters Pension Plan accommodate changes in benefits for employees who have been affected by the COVID-19 pandemic, and what specific provisions have been implemented to ensure continuity of pension credit during such interruptions? Employees of the Southwest Carpenters Pension Plan are particularly encouraged to review how these provisions may impact their retirement plans and benefits, especially given the unprecedented circumstances of the pandemic.

The Southwest Carpenters Pension Plan accommodated changes due to COVID-19 by extending various deadlines for participants, such as the 12-month deadline to apply for pension credit for periods of disability, and other deadlines regarding claims and appeals. These extensions were applied from March 1, 2020, to a period of up to one year after the original deadline or 60 days after the end of the COVID-19 national emergency, ensuring continuity of pension credit during the pandemic interruptions(Southwest Carpenters Pe…).

What enhancements to pension benefit calculations have been introduced for the years following January 1, 2021, under the Southwest Carpenters Pension Plan, and how do these changes affect participants working more than 1,800 hours? This question emphasizes the implications of increased benefit accrual rates and the actual processes employees must follow to calculate their pensions effectively.

Enhancements to pension benefit calculations effective January 1, 2021, under the Southwest Carpenters Pension Plan include an increase in the monthly benefit accrual rate for participants working 1,800 hours or more. The rate increased from $100 to $200, and for those working more than 1,800 hours, a maximum benefit accrual rate of $244.44 was introduced(Southwest Carpenters Pe…).

In the context of the Southwest Carpenters Pension Plan, could you explain the eligibility criteria for receiving a Service Pension and how employees can accumulate the necessary Pension Credits more quickly? This consideration is vital for members who wish to understand the retirement options available to them and the strategies they might employ in their careers to maximize their benefits under the Southwest Carpenters Pension Plan.

Employees of the Southwest Carpenters Pension Plan are eligible for a Service Pension after earning 30 years of Pension Credit. Additional Service Pension Eligibility Credit was introduced, allowing employees working over 1,800 hours annually to accumulate credits more quickly, up to a maximum of 2,200 hours(Southwest Carpenters Pe…).

How do temporary disability benefits interact with the accumulation of Pension Credits within the Southwest Carpenters Pension Plan? Specifically, employees may have questions about how their working history and service time might be affected should they take leave for health-related reasons, highlighting the intricate balance between pay and benefits during challenging times.

Temporary disability benefits under the Southwest Carpenters Pension Plan allow participants to accumulate Pension Credits during non-working periods if they are on short-term disability or receiving workers' compensation. Pension Credits can be granted for up to 1,200 hours annually, depending on the nature of the disability and employment history(Southwest Carpenters Pe…).

What are the implications of the revised definitions under the Required Beginning Date as specified by the Southwest Carpenters Pension Plan, particularly in compliance with the SECURE Act (Setting Every Community Up for Retirement Enhancement Act)? Employees should understand how these legislative changes affect their retirement strategies, especially in light of penalties for failing to comply with mandatory commencement dates.

The Required Beginning Date for the Southwest Carpenters Pension Plan was revised to comply with the SECURE Act. Participants born on or after July 1, 1949, must begin receiving benefits by April 1 of the calendar year following the year they turn 72. Failure to comply with this could result in a 50% excise tax(Southwest Carpenters Pe…).

How can employees of the Southwest Carpenters Pension Plan navigate the process for applying for pension credit during periods of Temporary Disability, and what specific documentation is required? This inquiry encourages a deeper understanding of protocol surrounding disability applications and the associated benefits that participants are entitled to under the Plan.

Employees applying for pension credit during periods of Temporary Disability must submit a written application within one year of the onset of the disability, and provide documentation such as state-approved short-term disability certification or workers' compensation benefits(Southwest Carpenters Pe…).

What are the implications of the retroactive increases to the Southwest Carpenters Pension Plan benefits aimed at participants who accrued credit during the years 2011 to 2020, and how can affected employees determine their eligibility for said increases? Employees often seek clarification on how historical contributions can manifest in current benefits.

Retroactive increases to the Southwest Carpenters Pension Plan benefits for the years 2011 to 2020 apply to participants who worked at least 1,000 hours in 2020 or under specific collective bargaining agreements. A 50% increase in benefit accrual rates was applied to these years, and eligible employees can determine their eligibility based on their hours worked(Southwest Carpenters Pe…).

What role does the Southwest Carpenters Administrative Office play in assisting employees who have questions regarding modifiability in their pension plans, and what are the best methods for contacting them for assistance? This question highlights the importance of communication within the organization concerning employee inquiries and issue resolution.

The Southwest Carpenters Administrative Office assists employees with questions regarding modifications to their pension plans. Participants can contact them at (213) 386-8590 or (800) 293-1370 for personalized assistance(Southwest Carpenters Pe…).

Can you detail the factors influencing the Benefit Accrual Rate for participants of the Southwest Carpenters Pension Plan for the calendar years after 2021, and how might employees calculate their expected pension benefits? Participants will want to understand the nuances of how their benefits are computed to make informed decisions regarding their retirement planning.

The Benefit Accrual Rate for participants of the Southwest Carpenters Pension Plan after 2021 increased to $200 for 1,800 hours worked, with higher accrual rates for additional hours. Employees can calculate their benefits by multiplying their benefit accrual rate by the applicable benefit factor(Southwest Carpenters Pe…).

In the event of legal actions regarding benefits under ERISA against the Southwest Carpenters Pension Plan, what venue restrictions apply, and what does this mean for participants seeking resolution in disputes? Employees need to be informed of the legal frameworks governing their benefits and understand their rights and the procedures that affect their claims within the Southwest Carpenters Pension Plan.

Legal actions regarding benefits under ERISA against the Southwest Carpenters Pension Plan must be filed in Federal District Court in Los Angeles County, California. This venue restriction defines the jurisdiction where participants must file claims(Southwest Carpenters Pe…).