Local public employers navigate benefits for their employees as health insurance costs rise

As 2025 winds down, concern over increasing health insurance premium costs for 2026 is on the rise. 

According to the health policy nonprofit KFF, health insurance premiums have risen 24% over the past five years, and this year alone, Americans who buy their insurance through the Affordable Care Act Marketplace have seen 26% higher costs and fewer tax credits during this year’s open enrollment.

However, the impact is not limited to those who select their insurance directly. According to KFF, 154 million Americans, including 3.1 million Minnesotans, recieve their healthcare through their employer, and those premiums are going up at a similar rate. 

There are many contributing factors for why a specific policy’s premiums might go up, but a significant source of the increase comes from the cost of health care. An analysis by KFF pointed to pharmaceutical companies and for-profit insurers and hospitals as drivers of the cost of care. And for employers offering group plans, the more an insurance plan is used, the higher the premium can climb. 

Here in Cook County, one group of employers who offer health insurance benefits to most of their employees are public employers. Those employers have seen a range of changes as costs rise. 

Cook County HR Director Allison Plummer told WTIP that the cost for health insurance for county employees is increasing 11.8% for 2026. She said that the county was “pleasantly surprised” that it wasn’t a larger increase, given the trends across the health insurance market.

Another organization, Cook County Schools, saw an increase in premium costs. Superintendent Chris Lindholm said ISD 166 employees have seen an increase of 30%. He said,”So our our staff members are seeing, you know, a swing of, if they’re on a family normal plan of $5,000 to $6,000 increase and at an annual level, that’s coming out of their pockets.”

City Administrator Mike Roth said Grand Marais is proved to be an outlier this year. This year the city is not seeing a change at all to their health insurance costs. He added that last year the city saw a decrease in costs, again, bucking the trend that most municipalities saw. 

While many people are bracing for an increase in their health insurance premium prices at the start of 2026, for Cook County Schools employees, that change happened at the beginning of the new school year. “We’ve heard from our staff that they’re taking home a lot less pay, even if they got a pay increase contractually,” Lindholm said. “They’re taking home less pay because of the cost of health insurance going up.”

For all of these organizations, making decisions about health insurance benefits is a group effort. Plummer works with an Employee Benefits and Wellness Committee to navigate the questions.

Lindholm said Cook County schools have an insurance committee which includes representation from the district’s employee unions. 

Roth also collaborates with city workers and AFSME, American Federation of State, County and Municipal Employees, which represents some Grand Marais employees, to select plans that meet the city’s needs. He said that most years, they aim to be consistent in what the city is able to offer for benefits, but sometimes a change is needed. “Every once in a while, we will go back on the market and look at what our options are and decide if we want to change to a different one,” he said. “I know that’s one of the factors why our rates have not gone up. Is within the past few years, we switched providers to become part of what’s called the Public Employee Insurance Program.”

Similar to the way the city of Grand Marais works with the Public Employee Insurance Program, Lindholm and Plummer said that ISD 166 and the county both work with the Northeast Service Cooperative, and the county selects plans through the Minnesota Healthcare Consortium. 

Though they are working within the framework of these larger organizations, each of the employers retains some autonomy when picking plans that fit best for their employees. Plummer said that the county must use plans provided by Medica if they buy through the consortium, but they can choose options within that, in an effort to balance costs with meeting employee needs. Plummer said, “There’s all these features that we can actually kind of modify, and that could then change the outcome of the premium for those plans.”

Sometimes, even with options within a larger system, the choices stop making sense for an employer. Roth explained that several years ago the city decided to make changes to the plans they offered. “2018 was the year that we decided we needed to change providers, because our expenses went up 29.9% in 2018,” he said. “The next year, they went down 53% when we changed providers. So you can see that there, there was a better option that we found. It also meant we had to change how we were providing services.”

For many public employees, the benefits offered along with their pay is a major consideration for them when looking at compensation. As insurance costs rise, however, some, like Cook County Schools employees, are seeing a reduction to their take-home pay. 

Plummer said that for health insurance, the county covers 80% of the premium cost, so increases in costs are primarily absorbed by the county budget, with a small percentage falling on individual employees. She added that for additional benefits, like dental and vision, the cost is felt entirely by employees.

A KFF study published in October of 2025 showed that health care spending was at an all-time high, and health insurance premiums are following suit. Plummer said that while each year is different, she’s been advised to expect more increases. She said the cooperative suggests that employers expect a 12-15% increase in costs each year.

The increasing costs are difficult to navigate for employers, and have impacted how they consider broader benefits and compensation they offer employees. But for some, simply cutting back on the benefits they offer is not necessarily the answer. “The benefits that we offer are a part of an employee’s total compensation package, and so that is something that we really have to consider,” Plummer said. “It helps with recruitment of staff. It helps with retention, especially in a landscape where it’s harder to recruit qualified staff, especially if staff are coming from out of the area and moving here, that we have to look at the entire total compensation package, not just the salary someone gets.”

While the stable cost for City of Grand Marais employees going into 2026 didn’t spur any major discussions this year, Administrator Roth said that in past years, the city has had to grapple with how to maintain benefits for employees. “It certainly made us think about it in 2018 when we had a 30% increase, but not just with wages, but really we just needed to think about, can we do this a very different way? And maybe the program itself just wasn’t designed the way it needed to be to meet our employees needs,” he said.

As public organizations look at what they can offer their employees, some, like Cook County, are also navigating state or federal requirements for compensation. “There are some state and federal requirements, and even working with our unions, those do impose some restrictions or working requirements when we are looking at negotiating benefits, changing benefits, and whatnot,” she said. “There are some benefits that we can’t necessarily get rid of or change too much because they are required by law. Or how we do go about modifying or changing benefits, we have to do so in a way where we coordinate and talk openly with our union representatives and all the while making sure all the while that we’re following state and federal requirements.

This year’s premium cost increases have gotten a lot of attention, but Lindholm said that this has been a long time coming for school districts across the state. He said that over the course of his career, he has seen a shift from districts offering full health insurance coverage to much more limited high-deductible plans that come out of employee paychecks. He added that he doesn’t see a future where those comprehensive plans become the norm again, because most school districts simply cannot afford it. “The revenue to school districts has in no way, shape or form, kept up with inflation over the last 20 years, and that’s why you see districts across the state you know, have cut program after program and are running class sizes in the 30s and even in the 40s to try to just balance budgets,” he said. “So unless something changes at the federal and or the state level, we’re not going to see any improvement to this health care situation.”

Hear more from Allison Plummer, Chris Lindholm, and Mike Roth by listening to an audio version of this story below.

Kirsten Wisniewski December 19, 2025