The following article has been contributed by Brian Marsella. Brian is the President of HPS/PayMedix and TempoPay, a company redefining how people access and pay for healthcare through employer-direct and health plan-embedded payment solutions nationally.
Renewal season has long been an exercise in tradeoffs, however as employers face another year of significant cost pressure, planning is complicated by the resulting employee affordability implications.
As financial wellness becomes more connected to health benefits, leaders are recognizing the implication that higher out-of-pocket costs have on employee behavior. It’s well-known that nearly 4 in 10 insured adults avoid or delay care because of the cost1. For the first time in five years, Gallup reported that less than half of Americans can consistently afford healthcare and medicine2; healthcare affordability has become one of the biggest financial stress points employees face today.
With renewals projected to come in around 9% this year before any plan adjustments are made, both employers and advisors will need to consider the implications of higher out-of-pocket costs on their employees, and how they can provide support to encourage timely utilization of needed care.
Employers are acutely aware that healthcare affordability is under pressure. For benefits advisors prepping for their annual renewal meeting, here is a concise set of points that explain why access and adoption still break down even when a plan is well designed:
- First, employees feel the timing of costs, not just the total. Copays, deductibles, and coinsurance costs leave employees weighing decisions about accessing care, especially when budgets are tight and competing priorities like housing, childcare, and transportation are already locked in.
- Second, cost sensitivity may show up as lower engagement with other benefits. When employees worry about basic healthcare affordability, they are less likely to invest in or fully use voluntary benefits, wellness programs, and navigation tools that the employer has layered into the strategy.
- Third, out-of-pocket exposure is affecting long-term decisions. Employees who feel they cannot absorb unexpected healthcare expenses may delay elective procedures, skip recommended care, or avoid switching into more cost-efficient plans, which in turn undermines the employer’s investment in overall plan design and clinical programs.
Affordability data worth bringing into renewal conversations
Care Decisions: Research from West Health and Gallup finds that about one-third of U.S. adults make tradeoffs to pay for healthcare, including cutting back on food, utilities, or household spending. Those pressures extend well beyond lower-income households, with a meaningful share of middle- and higher-income workers also reporting financial tradeoffs to cover healthcare costs. You can reference that type of polling as a backdrop for how employees approach every deductible, coinsurance bill, and pharmacy counter decision during the year.
Retirement Savings: Vanguard reported that 6% of participants took hardship withdrawals from their 401(k) in 2025, up from 2% in 20203. For those individuals earning $100,000 or less annually, the top two reasons for the hardship withdrawal included keeping their home and covering medical expenses.
Financial Reality or Gaps: 53% of Americans can't cover an unexpected $1000 bill in full4; The average an individual spends out-of-pocket annually on healthcare (excluding premiums) is $1,100-$1,600. With healthcare claiming more of the total rewards budget, little room is left for investment in employee compensation and wages creating more downward pressure on employees’ ability to make room for care costs in their budget.
Why this matters at renewal
At renewal, many employers focus on the familiar levers: funding strategy, contribution changes, network options, clinical programs, and communication plans. These decisions matter, but it’s likely the plan will underperform if employees cannot manage the timing of out-of-pocket costs when care is needed. This is due to underutilization of necessary care.
A historical belief is that utilization is bad for costs. The reality is that underutilization of needed care can be just as damaging to the plan as overutilization. It contributes to people entering the system sicker and in higher-cost settings, which ultimately drives claims higher.
For advisors, that creates a practical question during renewal discussions: how can a client preserve the integrity of its plan strategy while making the employee experience more manageable? The answer may be to add an interest-free payment layer that supports access without requiring a wholesale redesign of the plan. It requires a change in mindset to recognize the value of needed utilization and to see how giving employees a defined time horizon to repay costs throughout the year is key.
A simpler way to support plan adoption
One of the strongest use cases for layering affordability tools into benefit design is not just easing financial pressure, but helping employees use the programs the employer has already invested in. When employees have a predictable way to manage costs over time, they may be less likely to avoid care because of the immediate financial hit.
That can be especially valuable early in the plan year, when deductibles reset and employees are often most sensitive to out-of-pocket expenses. An affordability layer helps bridge the gap between the theoretical value of the plan and the employee’s real ability to engage with it.
For benefits advisors, this creates a more compelling renewal story. The conversation shifts from defending cost increases to demonstrating that the employer is adding a concrete mechanism to improve access, reduce friction, and help employees access the care they need when they need it.
When are advisors bringing affordability tools into the strategy mix?
As the connection between cost management and employee experience increases, it’s pushing more attention toward payment and affordability tools as part of overall benefit strategy rather than as standalone add-ons.
Traditional tools like Health Savings Accounts (HSA), Flexible Spending Accounts (FSA), and Health Reimbursement Accounts (HRA) focus on tax-advantaged saving and reimbursement. They work well when employees can set funds set aside, and in the case of HSAs, when balances can stay invested over time. Interest-free financing is different: it’s designed to give employees a means to pay for care when their savings or account balances are not yet built up. They spread repayment over time without interest charges or fees, providing a financial safety net to anyone with out-of-pocket exposure.
Recent employer-focused analysis highlights that many employees face unexpected healthcare expenses in the $1,000–$2,000 range. A growing share of people do not have that level of liquidity and are neither enrolled in an HSA nor actively funding one. In that context, financing can be positioned as a complement to HSAs and similar accounts, helping employees manage near-term costs while building the financial resilience and budget to fund and grow HSA dollars over the long term.
For brokers and consultants, incorporating financing into renewal discussions can be one way to address affordability, access, and engagement in a concrete way. The focus is less on any single product and more on whether an affordability layer can sit alongside existing plans and help employees manage their costs when care is needed.
SOURCES
1 KFF – Health Care Costs and Affordability (Health Policy 101)
2 West Health – Gallup Affordability Index (2026)
3 Vanguard — How America Saves (2026)
4 Bankrate — Emergency Savings Report (2026)
Brian Marsella is the President of HPS/PayMedix and TempoPay, a company redefining how people access and pay for healthcare through employer-direct and health plan-embedded payment solutions nationally. For more information regarding interest-free healthcare financing, feel free to connect with Brian on LinkedIn or by emailing hello@tempopay.com.