Employers surveyed by WTW expect health benefit costs to rise at least 6 percent next year, and to continue going up for several years because health care providers typically sign multiyear contracts with health insurers.
“It’s not over after this year,” Dr. Levin-Scherz said.
More than half of Americans get health coverage through an employer. Workers on average pay more than a quarter of the total premium for family health coverage, while employers pay the rest. Employers may shift more of that cost to workers — but probably not all of it, since recruiting and retaining staff remain challenging.
“I’m advising my employer clients to eat the health care costs,” said Allen J. Reynolds, a tax adviser in Sioux City, Iowa. Workers are already struggling to manage costs, he said, including higher mortgage rates, which make it difficult to buy a home: “The employee is getting hit from all different angles.”
Contributions to 401(k)s
The contribution limit for 401(k)s will increase next year to $22,500 from $20,500 this year, the I.R.S. announced on Friday. (Extra contributions for workers 50 and older will also increase, to $7,500 from $6,500 this year.) These contributions are deducted from your paycheck — but they go into accounts to help you fund your retirement, and employers often match them to encourage saving.
Contributions to health spending accounts
Inflation has increased those amounts as well. If you have a flexible health spending account, which employees contribute to pretax to help cover medical costs, you can contribute an extra $200 next year. The limit for 2023 rose to $3,050 from $2,850 this year, the I.R.S. announced this week.
If you have a health savings account, a different type of tax-favored account available with certain high-deductible health insurance plans, you can contribute $3,850 as an individual and $7,750 for family coverage next year. (Extra contributions for people over 55 remain capped at $1,000.)
With so many variables, it makes sense to check your withholdings early next year to make sure they are not too high or too low, especially if you have had a life change, like getting married or having a baby, Mr. Reynolds said. If you overpay, you’ll get a refund at tax time. If you underpay, you may owe a penalty.
The I.R.S. offers an online withholding estimator to help you make the calculations. You can make changes by submitting a revised W-4 form to your employer.