The stock of major health care insurer United Health has dropped from $594 per share in April 2025 to Friday’s close at $237 per share.  That’s about a 60% drop in value in a little over 3 months.  And, from the trends that I’ve been watching and some recent announcements I don’t think that stock drop bodes well for companies that will be paying premiums for employee health care in 2026.

United Health has had some non-revenue issues such as the CEO of one division being stalked, shot, and killed while attending a conference in New York City.  But the major issue is probably not even company related. . . . it is simply the cost and frequency of use of health services in the United States.

Here’s what was written about the company’s Earnings Report last week, “In its second quarter release, UnitedHealth stated that its lower earnings were because healthcare costs were rising faster than insurance pricing. . . . The company also said that it expected the cost and pricing trends to continue for at least the rest of the year. . . “

In other words, the combination of American health care service pricing and the frequency of use of health care by Americans is outpacing the ability to pay claims with the available premium dollars collected.  That’s a big problem for United Health, but also will become a big problem for businesses in America as they will soon be asked to increase their payment to their health care providers for the premiums they pay as an employee benefit.

And, the rise in health costs don’t seem to be ending anytime soon.  Another article on United Health had this comment “. . .  medical cost trends (are) expected to further increase from an estimated sum of 7.5% in 2025 to 10% in 2026”,

Those cost increases won’t just be for United Health clients, Medicare recently gave notice that they believe the annual premium paid by most Medicare recipients is expected to increase 11.6% for 2026 coverage. Still don’t believe me when I say you better look for premium increases?  Here’s another indicator — this article from MarketWatch indicates that those that receive health insurance from the Affordable Care Act (ACA) markets will see a median premium increase of about 15%.

So, as you start to do the work on your 2026 budgets it may be time to make some difficult decisions such as passing more of the cost of benefits on to the employees themselves.  However, as the labor market seems to be tightening up that decision could lead to disenfranchised employees and lead to more problems that you don’t want to be tackling.

In any regard, the sooner you can get health insurance quotes and the earlier you make these budgetary and personnel decisions the better off you will be.

Here’s a recent article from CNN titled “Here’s why you may be spending more on health care next year”.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Figuring out the benefits that our funeral home would offer our employees was one of my least favorite activities in operating a business.  I always knew what I would like for benefits but my needs and wants were different from my employees — and most of the team members had differing needs and wants. . . . .Younger employees wanted child care help and older employees preferred full payment of health care costs.

I eventually sat down with each full-time employee and talked to them about what would be their perfect benefit package.  Our business eventually came to a decision that we would offer a “Cafeteria plan” of options with a fixed amount of annual benefit dollars per employee.  That solved my dilemma of being the person that chose our benefit package and let each employee put money to their specific need. . . . .In that package we offered health insurance payments to our group plan, child care payment benefits, additional profit-sharing retirement money, other insurance options such as Aflac supplemental insurance, and some other items.

As to personal thoughts I have some opinions based on my time on the Board of the University of Minnesota where we operated a physicians group and had a partnership with a hospital group for the operation of the University hospital assets.  I will acknowledge that hospital operating costs have low margins but my opinion is simple, we have to find a way to drastically bend the curve of health care costs and utilizations or eventually America will not have the resources for business investment simply because we are putting so much of our economy into “servicing” the health needs of our citizens.

In 2023 the Gross Domestic Product (GDP) of health care services was 17.6% of the economic activity of the United States.  In 1960, the United States GDP percentage for health care services was only 5%.  That low percentage is one reason the 1960’s was a period where “U.S. private investment grew rapidly, especially in the first half of the decade, outpacing the growth rates seen in some later periods. This was fueled, in part, by a 106-month economic expansion, the longest in US history up to that point.”

That Genesis artificial intelligence generated statement ( the above quote) gives some indication to the potential lost “opportunity costs” that the United States is forgoing because we cannot get a handle on our rising health care costs.  It is my hope that this is one of the area’s where articifical intelligence can be harnassed to help with diagnostic issues and treatments knowing a patient’s DNA, medical history, family history, and current vital signs. . . . and do so by bending the cost curve downward.

On the other hand, one cannot look at the increased health care services costs (as a percentage of our GDP) of the past 60 years without acknowledging that life spans in the United States have increased from about 69 years in 1960 to 79 years in 2024.  That’s an extra 10 years of life the average citizen is getting on this planet. . . . .  What cost would one put on that?

However, it is probably time to get your health insurance quotes and make some difficult decisions on your budget for 2026.

Related Article —  “U.S. Life Expectancy 1950-2025  — Trends and influences over the Decades.”  North American Community Hub Stats

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While it can be tough being an employee of a family-owned funeral home, sometimes employees don’t understand it can be tough being the owner or boss as well.  I’ve been on both sides — being an employee in my college days and then coming home and being the boss. . . . I’ve seen it from both sides and know the role you are in is not always easily understood by the other side.

I was the owner of a funeral home for almost 35 years and had many great team members that I worked with.  Originally, especially when we were smaller and had less employees, employee benefits were pretty easy to dole out — salary compensation, health insurance, and paid vacations.

As our work staff grew as the years went by and employees became more diverse in their lives I was able to visit with them about what employee benefits would be important to them.  Of course, there was pay scale.  .  . but there was more, there was child care, continuing education payments, health care options, retirement accounts, and of course, paid time off.

And, as you might imagine, different employees had differing wants and needs of these benefits.  Eventually, we came up with what a lot of companies do — we put an amount of money on the table for each employee annually and then let them pick and choose which of the available “cafeteria options” that they wanted to partake of.  It worked out very well and we also offered a paid membership to a club such as Kiwanis or Rotary, a retirement match, and a year-end bonus dependent on how many death calls the firm did over a year’s time.

By the way, as an aside, I was always happy to pay year-end bonuses based on call volume because if we reached those “stretch” volume numbers, the funeral home had a good year also and there was always money to pay those bonuses.  In addition, by charting our numbers monthly, all employees knew where we stood on the year. . .and that was great knowledge for employees to know whether it was good or bad news.

Lately, as this article from Fortune will attest to, is the idea of giving paid time off for “Volunteering” as another benefit of working for your firm.  The article goes on to state that stress is rising in the workplace and workplace “well-being” is on the decline.  However, one survey found that there was one clear positive effect on employees and that was “Volunteering”.

The idea is to give a paid work-day two to four times per year to an employee so that they can volunteer their time in some community endeavor.  Here’s what Mark Snyder, a professor at the University of Minnesota found in his research on the benefits of volunteering:

“People who volunteer, as a result of their volunteering, have a higher sense of self-esteem, greater happiness and emotional well-being, and increased physical health.  Combining it with work which is a big part of people’s identities, could make for “particularly powerful experiences of volunteering” that will be highly valued. . . .It’s a message that the employer cares enough about the community to invest in the community through providing ways for their volunteers to do good.” 

And, Ares Management which conducted a study titled “Why Workplace Volunteer Programs Matter” makes the following points:

• Volunteers are more satisfied overall with their job (79% vs. the 55% who did not volunteer).
• Volunteers are more satisfied with their company’s culture (75% vs. 54%) and leadership (71% vs. 45%).

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  I think the idea of “Volunteerism” as a company benefit could be very beneficial for family-owned funeral homes.  While your staff is probably small and you cannot afford to have them all gone on the same day because of the random nature of the business, the idea of letting your employees join other major employer volunteer forces could work very well.

What about allowing an employee the ability to join a Habitat for Humanity build-out or American Heart Association blood drive with an established employer group?  Having them join with a larger group such as a elderly care center or a hospice group doing a day of volunteering would also put them in touch with people whom they may come in contact with over the course of business. . . . and knowing and working with these people in a common bond could only bring positive influences to your business.

As you make your final decisions about 2025 think about adding a paid “Volunteering” benefit, even if it is only one day per year, to your employee benefit options.  It’s something I think most employees would look forward to.

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