EBRI: Employers Owe Billions in 2025 Health Costs Under No Surprises Act Arbitrations

Arbitration awards resolving medical payment disputes under the No Surprises Act represented an estimated $8.39 billion in additional health plan payment obligations for employers sponsoring health plans that had determinations close in 2025, according to new research from the Employee Benefit Research Institute.

The No Surprises Act, passed in 2020 and effective as of 2022, generally protects patients from unexpected out-of-network balance bills for covered services. Its federal independent dispute resolution process, known as IDR, allows health plans and providers to resolve eligible payment disputes that remain unsettled after negotiation, without involving the patient.

Because of the legislation, all plan sponsors’ healthcare costs could be driven higher. According to EBRI’s report, “The Federal Independent Dispute Resolution Process and Employment-Based Health Plan Costs,” new federal data clarify that health plans owed an estimated 63 cents for every $100 in employment-based health plan costs as of year-end 2025. The calculation represents approximately 0.625% of the annual estimated $1.34 trillion in national employment-based health plan costs, including premiums and equivalent costs for self-insured plans, the report stated.

Paul Fronstin, director of health benefits research at EBRI, said, during a media briefing on the report, that the $8.39 billion estimate does not necessarily establish how much the No Surprises Act’s arbitration process increased premiums. Rather, he said, the figure provides a clearer picture of what plans involved in disputes owe after their initial benefits payments for covered care while accounting for patient cost sharing.

Beginning in the third quarter of 2025, the federal Centers for Medicare and Medicaid Services added initial payment and patient cost-sharing data to their federal IDR public-use files, which allowed EBRI to measure additional plan obligations more directly than prior comparisons that were based solely on benchmark payment rates, the report states.

Sponsors’ use of the IDR process revealed far greater initial projections than the approximately 22,000 cases annually that federal agencies initially projected. Instead, some 2.56 million disputes were initiated in 2025, according to the Centers for Medicare and Medicaid Services.

The Department of Labor has continued to prioritize health plan enforcement over the past decade, particularly following the enactment of the Consolidated Appropriations Act of 2021. The CAA amended the Employee Retirement Income Security Act to enhance fiduciary oversight of health plan service providers and provided funding for the continued implementation and enforcement of the No Surprises Act.