November 2025 Health Insurance & Benefits Roundup: Payer Retrenchment, Record Premiums, and the Scramble for Stability

November arrived with a paradox that defined the final stretch of 2025: while millions of Americans were actively choosing health plans during open enrollment, the institutions underwriting those plans were signaling unprecedented financial stress. AM Best reaffirmed its negative outlook on the entire U.S. health insurance segment, major carriers announced layoffs by the hundreds, and Aetna confirmed it would abandon the ACA individual marketplace across all seventeen states where it operated. At the same time, the KFF Employer Health Benefits Survey landed with sobering numbers showing family premiums approaching $27,000, Congress laid the groundwork for pharmacy benefit manager reform, and a growing wave of employers turned to individual coverage health reimbursement arrangements as a structural alternative to group plans. For benefits professionals, brokers, and HR leaders navigating the 2026 plan year, November was less a single news cycle than a collision of long-building pressures finally arriving at once.

The month's developments did not unfold in isolation. Rising medical utilization, specialty drug costs, deteriorating government program risk pools, and regulatory uncertainty created a feedback loop that touched every corner of the benefits ecosystem. What follows is a narrative tour through the eight stories that mattered most, stitched together to reveal how they connect and what they mean for the year ahead.

AM Best Holds Firm on Its Negative Outlook as Payers Cut Thousands of Jobs

The headline that set the tone for November came on November 24, when AM Best formally maintained its negative outlook on the U.S. health insurance segment, a position first adopted in August 2025 when the ratings agency downgraded the industry from stable. The reasoning had not changed so much as deepened. Accelerating medical utilization, surging pharmacy expenses driven by specialty drugs and GLP-1 medications, and deteriorating risk pools in both Medicaid and individual market lines continued to erode underwriting results. According to AM Best's analysis, underwriting earnings had dropped sharply through late 2024, and carriers entered 2025 facing medical and pharmacy trend lines that consistently exceeded their pricing assumptions. The agency noted that while some improvement may emerge in 2026, the pressures facing the segment are likely to persist into 2027 as it may take several pricing cycles to fully correct course.

What made the November confirmation especially notable was the context of an industry already shedding workforce at a pace not seen in years. Becker's Payer Issues tracked 32 payers cutting jobs during 2025, a rolling tally that grew meaningfully in November. Horizon Blue Cross Blue Shield of New Jersey announced 242 position eliminations, roughly four percent of its 5,500-person workforce, with leadership citing "unprecedented financial challenges" that made the current cost structure unsustainable. Cigna's Evernorth division notified 143 employees across Arizona facilities that their roles were being eliminated. MDwise, the Indiana Medicaid managed care plan owned by McLaren Health Care, filed WARN Act notices for 238 layoffs scheduled for January 2026, along with a full office closure in Indianapolis. And UnitedHealth Group's Optum subsidiary quietly let go of dozens of remote healthcare technology employees, part of a broader restructuring that would expand into hundreds of additional cuts in early 2026.

These were not isolated cost-cutting exercises. They reflected the same financial gravity AM Best was describing from the ratings desk: an industry whose revenue growth could not keep pace with the compounding costs of caring for sicker, older, and more pharmaceutically complex populations. For employers renewing group plans in this environment, the implication was clear. Carriers under margin pressure have less room to absorb unfavorable claims experience, which translates directly into steeper renewal increases, tighter network negotiations, and more aggressive utilization management.

Aetna Abandons the ACA Marketplace for the Second Time

Perhaps no single announcement in November carried more immediate consumer impact than CVS Health's confirmation that Aetna would fully exit the ACA individual marketplace across all seventeen states where it offered plans. Approximately one million enrollees were left to find new coverage during open enrollment, which had begun on November 1, just days before the exit became final. The withdrawal spanned some of the nation's largest ACA markets, including Florida and Texas, where Aetna had been a significant presence.

CVS Health CEO David Joyner framed the decision in starkly strategic terms, telling investors there was "not a near or long-term pathway for Aetna to materially improve its position" in the individual market. The company projected losses approaching $400 million from its ACA book in 2025, a figure made worse by the anticipated expiration of enhanced premium subsidies that had drawn millions of new enrollees into marketplace plans since 2021. This marked the second time Aetna had retreated from the ACA exchanges, having previously exited during the 2017-2018 cycle before returning in 2021 when enhanced subsidies made the market temporarily more attractive.

The timing created a logistical challenge for consumers and navigators alike. With open enrollment already underway, affected members had to identify alternative carriers, compare networks, and verify provider continuity under compressed timelines. For employers with employees who rely on marketplace coverage, whether through spousal plans, part-time worker arrangements, or ICHRA-funded individual policies, the Aetna exit underscored a persistent vulnerability: the ACA individual market remains subject to carrier participation decisions that can upend coverage continuity with little warning.

KFF Survey Reveals Family Premiums Approaching $27,000

The annual KFF Employer Health Benefits Survey, released in late October and widely dissected throughout November, delivered the numbers that benefits professionals had been bracing for. Average annual premiums for employer-sponsored family coverage reached $26,993 in 2025, a six percent increase over the prior year and a figure that KFF Health News pointedly noted now rivals the price of a new car. Single coverage premiums rose five percent to $9,325. Workers on family plans contributed an average of $6,850 out of their own paychecks, a figure that has been climbing steadily and that represents a meaningful share of take-home pay for middle-income households.

The premium growth rate of six percent outpaced both general wage growth at four percent and overall inflation at 2.7 percent, extending a multi-year pattern in which healthcare costs consume an ever-larger share of compensation. High deductibles continued to spread as a cost-containment mechanism, with 34 percent of covered workers now facing deductibles of $2,000 or more. Among small firms, the average deductible reached $2,631, a threshold that effectively turns many plans into catastrophic-plus arrangements where routine care costs come directly out of pocket.

Two trends within the KFF data stood out for their longer-term significance. The first was the dramatic expansion of GLP-1 coverage for weight loss. Among firms with 5,000 or more employees, 43 percent now cover GLP-1 medications for weight management, up from just 28 percent the prior year. Two-thirds of those large employers reported that GLP-1 coverage had a "significant" impact on their drug spending, a finding that helps explain why pharmacy costs have become one of the dominant drivers of the industry's financial strain. The second notable finding involved mental health access: only 70 percent of workers believed their plan provided timely access to mental health services, compared to 92 percent for primary care, a gap that quantified what advocates had long described anecdotally.

A Historic Increase to the Dependent Care FSA Limit

While premium data dominated benefits conversations, a quieter but potentially transformative development arrived through the One Big Beautiful Bill Act, which raised the dependent care flexible spending account annual limit from $5,000 to $7,500, effective January 1, 2026. This represented the first meaningful increase to the dependent care FSA cap in nearly four decades, a period during which childcare costs had risen exponentially while the tax-advantaged ceiling remained frozen. The legislation also raised the maximum employer-provided childcare tax credit from $150,000 to $500,000, providing an additional incentive for companies investing in on-site or subsidized care.

For working families, the additional $2,500 in pre-tax savings represented real relief, particularly in metropolitan areas where full-time childcare costs routinely exceed $20,000 per year. But the change also introduced a compliance wrinkle that benefits administrators needed to address quickly. The dependent care FSA is subject to nondiscrimination testing under the 55 percent average benefits test, which ensures that the program does not disproportionately benefit highly compensated employees. With a higher cap, highly compensated employees are likely to maximize their contributions, potentially pushing the average benefit ratio out of compliance. Employers that simply raised the limit without modeling the testing impact risked having their entire program disqualified, turning what looked like good news into an administrative headache.

The timing was notable as well. With open enrollment for 2026 plans underway throughout November, the dependent care FSA increase became one of the top communication topics for benefits teams, requiring updated enrollment materials, revised payroll configurations, and fresh employee education about the higher ceiling and its implications for household budgets.

State PBM Reform Accelerates Ahead of Federal Action

November's pharmacy benefit manager landscape was shaped by the accelerating collision between state-level reform efforts and the growing demand for a unified federal framework. The most closely watched state-level development was the ongoing legal battle over Arkansas Act 624, a first-of-its-kind law banning PBMs from owning or operating pharmacies. A federal court had blocked enforcement in July, finding that the law likely violated the Commerce Clause by discriminating against out-of-state companies and conflicted with federal TRICARE contracting requirements. The Arkansas State Board of Pharmacy filed its appeal on July 31, and the case remained in active litigation throughout November, serving as a bellwether for how far states can go in restructuring PBM business models.

Meanwhile, Massachusetts was moving forward with implementation of its own PBM licensing and transparency requirements under Senate Bill 3012, signed by Governor Maura Healey in January 2025. PBM license applications had been due by October 15, carrying a $25,000 fee, with full licensing requirements taking effect on January 1, 2026. The law established enforcement authority for the state insurance commissioner and mandated detailed reporting on rebate flows, spread pricing, and formulary management practices.

The growing patchwork of state rules intensified calls for federal preemption. The ERISA Industry Committee, known as ERIC, joined more than 100 organizations in urging Congress to enact comprehensive PBM legislation that would create uniform standards for employer-sponsored plans and reduce the compliance burden of navigating dozens of conflicting state regimes. That advocacy set the stage for what arrived in early December: the Crapo-Wyden Pharmacy Benefit Manager Price Transparency and Accountability Act, a bipartisan Senate Finance Committee bill proposing to delink PBM compensation from negotiated rebates, expand reporting requirements in Medicare Part D, and reinforce any-willing-pharmacy protections for independent and rural pharmacies.

Federal Mental Health Parity Enforcement Pauses While California Pushes Forward

The regulatory landscape for mental health coverage split into two divergent tracks in 2025, and by November the contrast had become stark. On the federal side, the Departments of Labor, Health and Human Services, and the Treasury had suspended enforcement of the 2024 MHPAEA Final Rule's enhanced provisions, influenced by Executive Order 14219 and ongoing litigation brought by employer groups challenging the rule's expanded nonquantitative treatment limitation testing requirements. The enforcement pause applied only to provisions that were new relative to the 2013 Final Rule; core statutory obligations under MHPAEA, including the requirement to perform and document comparative analyses of NQTLs, remained in effect. But the practical result was a shelving of the more aggressive testing and documentation standards that advocates had fought for years to establish.

California moved in the opposite direction. Insurance Commissioner Ricardo Lara finalized landmark parity regulations implementing Senate Bill 855, establishing some of the most protective mental health coverage requirements in the country. Under the new rules, insurers operating in California must arrange and pay for out-of-network mental health treatment when an in-network provider is not available within clinically appropriate timeframes. The regulations also require that any denial of substance use disorder benefits be reviewed by a board-certified addiction specialist physician who is competent to evaluate the specific clinical issues involved. Commissioner Lara framed the action explicitly as a counterweight to federal retrenchment, stating that "at a time when access to this lifesaving care is being threatened at the federal level, California will not turn its back on the vulnerable."

For multi-state employers, the divergence created a compliance complexity that defied simple policy templates. Plans operating in California faced significantly higher standards than the federal floor, while plans in states without supplemental parity laws operated under a regime where the most rigorous federal requirements were effectively on hold. Benefits teams with national footprints found themselves needing to track parity obligations on a state-by-state basis, a fragmentation that added cost and complexity to plan administration at a moment when both were already under pressure.

Kaiser Permanente Plants Its Flag in Nevada

Among the month's strategic moves, Kaiser Permanente's completion of its joint venture with Renown Health in northern Nevada stood out as a signal of how integrated delivery systems are expanding into new geographies. The transaction gave Kaiser Permanente a co-ownership stake in Hometown Health, the health plan previously owned by Renown, and established the Kaiser Permanente Nevada brand as a new entrant in the Reno-area market. The joint venture included plans for two additional outpatient facilities in 2026, each offering primary and specialty care alongside lab and radiology services, with retail pharmacies scheduled to follow in 2027.

New health plan options for northern Nevada residents are in development, with Kaiser Permanente and Renown Health planning to share details before the fall 2026 open enrollment period for coverage beginning in the 2027 plan year. The move represented Kaiser Permanente's first expansion into a new state in years and reflected a bet that the integrated model, combining insurance and care delivery under one organization, can succeed in a mid-size market where fragmented fee-for-service arrangements have historically dominated. For employers in the Reno-Sparks metropolitan area, the arrival of Kaiser Permanente will introduce a fundamentally different plan design option, one built around closed-network coordination, salaried physicians, and a technology stack designed for continuity of care rather than episodic billing.

ICHRA Adoption Surges as the Individual Market Heats Up

The structural story that tied many of November's threads together was the continued surge in individual coverage health reimbursement arrangement adoption. According to HRA Council data, approximately 450,000 people were enrolled in ICHRA-funded benefits for the 2025 plan year, a figure widely considered a floor for the broader market that may encompass a million or more individuals when dependents and unreported arrangements are included. Adoption among applicable large employers grew 34 percent between 2024 and 2025, and retention remained remarkably strong, with 92 percent of employers that offered an HRA in one year continuing to do so the next.

The ICHRA model, in which employers provide a defined contribution that employees use to purchase individual market coverage, gained momentum for several reinforcing reasons. Employers facing the kind of premium increases documented in the KFF survey saw ICHRAs as a way to set predictable benefits budgets without absorbing the full volatility of group plan renewals. The Aetna ACA exit, while disruptive for affected enrollees, paradoxically validated the individual market's maturation: even as one carrier left, dozens of others remained, and the exit prompted conversations about whether employer-funded individual coverage could provide greater carrier diversity than traditional group plans.

The venture capital community took notice as well. Four of the companies named to CB Insights' 2025 Insurtech 50 list were ICHRA-focused platforms: Stretch Dollar, Thatch, Venteur, and Zorro. Their inclusion alongside established insurtech names signaled that investors view the defined-contribution health benefits model as a durable category rather than a niche experiment. The investment thesis is straightforward: if individual market premiums continue to rise, as evidenced by the 20.6 percent average premium increase for 2026 ACA plans, the administrative and advisory layer that helps employees navigate those choices becomes increasingly valuable.

• Approximately 450,000 people were enrolled in ICHRA benefits in 2025, with 34 percent growth among large employers
• 92 percent of employers maintained their HRA offerings year-over-year, indicating strong satisfaction
• Four ICHRA platforms earned spots on CB Insights' Insurtech 50, reflecting significant venture capital confidence in the model

For brokers, the ICHRA surge represents both an opportunity and a strategic pivot. The traditional group plan placement model, in which a broker negotiates with two or three carriers and presents options to an employer, gives way to a consultative model focused on employee decision support, individual market navigation, and compliance with the complex interplay between HRA regulations and ACA subsidy rules. Brokers who build expertise in this space are positioning themselves for a market that appears likely to grow substantially through the remainder of the decade.

Looking Ahead to December and the 2026 Plan Year

November 2025 will be remembered as the month when the financial pressures on U.S. health insurance became impossible to dismiss as cyclical. AM Best's maintained negative outlook, the breadth of payer layoffs, Aetna's marketplace retreat, and the KFF premium data all pointed to an industry in the midst of a structural repricing. At the same time, developments in dependent care FSAs, state PBM reform, mental health parity, and ICHRA adoption showed that the benefits ecosystem continues to evolve in ways that create both challenges and new possibilities for employers and their employees.

As open enrollment winds down and attention shifts to January 1 effective dates, the stories seeded in November will continue to unfold. The Crapo-Wyden PBM bill will test whether Congress can translate bipartisan consensus into law. California's mental health parity regulations will begin generating real-world claims data that other states may use as a template. Kaiser Permanente's Nevada expansion will reveal whether integrated delivery can win in new territory. And the ICHRA market will face its first full plan year with a significantly changed ACA landscape, minus Aetna and plus sharply higher premiums. The one certainty heading into December is that standing still is not an option for anyone in the business of designing, selling, or managing employee benefits.