Comp & Benefits
Most watched this week: Medical costs may rise nearly 10% by 2027; Number of the week: $103,265 (new proposed H-1B fee); Quote of the week: University of Florida Professor Brian Swider on the limitations of first impressions.
The rapid expansion of data centers in the United States has intensified the shortage of skilled workers. Contractors such as Turner Construction, Clayco, and DPR Construction shared new recruitment and retention strategies at industry events, including student loan repayment, incentives for mobile projects, and the concept of 'rehiring,' while emphasizing the importance of building local workforce pipelines.
The U.S. Department of Labor and several other federal agencies issued joint guidance on Wednesday, responding to questions in class action litigation over tobacco surcharges in employer-sponsored group health plans. The guidance clarifies that plans or issuers are not required to retroactively provide health incentives if employees complete reasonable alternative standards, and it also addresses disclosure obligations. This guidance provides greater clarity for human resources departments in building compliant plans.
The latest annual survey by the Business Group on Health (BGH) shows that healthcare costs for large employers are expected to rise nearly 10% in 2027, with an actual increase of 8.8% in 2025, the highest on record. Employers face 'unprecedented' cost pressure and are responding by reviewing suppliers, introducing new pharmacy benefit management models, and tightening GLP-1 coverage.
New research released by professional services firm Aon predicts that average U.S. employer medical costs will surpass $19,000 per employee in 2027, a 9.5% increase year-over-year. Although employers cover over 80% of health insurance costs, the burden on employees is also rising significantly: average employee out-of-pocket expenses are expected to reach $5,297 in 2026, up 7.9% from 2025. The study notes that rising chronic disease prevalence, specialty drugs, and the adoption of GLP-1 therapies are driving up medical expenditures, while AI applications are indirectly impacting medical billing. Employers face the dual challenge of balancing benefit sustainability with talent attraction.
New survey data from MyPerfectResume reveals that 35% of U.S. workers have delayed their planned retirement age due to rising living costs, and 14% do not expect to fully retire. The findings highlight the impact of immediate financial obligations on long-term savings.
A survey by the National Alliance of Healthcare Purchaser Coalitions reveals that 83% of employers are forced to make tradeoffs with wage increases due to rising healthcare costs, and 93% expect to shift costs to workers. Retention remains a top priority, with 92% saying costs hurt competitiveness.