Extreme and inflationary independent dispute resolution (IDR) awards are forcing employers to pay more for healthcare, according to a new analysis from The ERISA Industry Committee (ERIC). This latest report underscores how far the No Surprises Act’s IDR process has strayed from its original intent, and how the cost is landing on workers’ premiums and benefits.
Employer-sponsored insurance covers approximately 154 million Americans, and 67 percent of covered workers are enrolled in self-funded plans, which are absorbing escalating IDR costs. As the report notes, self-funded employers already take on 90 percent of IDR-related costs, with some facing more than $10 million in unanticipated IDR fees in a single year.
According to James Gelfand, President and CEO of ERIC, the current system is “blowing holes in budgets. It’s making employers have to make sacrifices that are hurting employees.”
Key Takeaways:
- “IDR awards alone add between 1 and 6 percent to overall health care trend. These percentages translate into tens, sometimes hundreds, of millions of dollars annually for plan sponsors who are already facing rising health care costs.”
- “Litigation removed the QPA as the anchor, arbitration became reliably profitable for the parties that use it most, an entire private equity-driven industry arose to engage in mass IDR filings, and volume has since exceeded the CBO projection by multiple orders of magnitude. This is not what Congress intended.”
- “One sponsor tracked its own IDR-related payments rising from approximately $3.5 million in 2025 to more than $6 million in the first half of 2026 alone, on pace to exceed $12 million for the year.”
- “New York’s Empire Plan attributed a nearly 10 percent premium increase largely to IDR-driven claims growth.”
- “[A] union health plan covering 20,000 trades workers in New York raised premiums by an additional 75 percentage points specifically to offset arbitration awards and fees.”
- “32BJ Health Fund, a Taft-Hartley trust covering building-service workers, disclosed in July 2026 that it had been ordered to pay IDR determinations of approximately $37 million on claims originally expected to cost only $8 million. Further, they had paid out over $700,000 in entity fees over the same period.”
- “1199SEIU Funds, representing health care workers, reported being involved in 4,919 IDR disputes since the process became operational in 2022, with awards to providers totaling $52 million above regular out-of-network rates.”
- “Costs absorbed through IDR awards eventually reach workers through higher contributions, higher cost sharing, or narrower networks, which makes this a coverage affordability problem rather than a provider-payer dispute.”
- “If IDR were returning awards near the QPA, plan costs would be roughly unchanged, and the patient savings would represent a genuine reduction in system spending.”
ERIC’s analysis also included recommendations for reforming IDR, including:
- Restoring the QPA as IDR’s anchoring factor, rebuttable only by clear and convincing evidence;
- Creating a time-limited appeal process for procedural and factual errors;
- Investigating high-volume filers and considering volume-based fee structures; and
- Requiring transparent reporting of IDR outcomes by plan type.
The Bottom Line: Rampant abuse of the No Surprises Act has become an affordability crisis. Escalating IDR costs have already translated into higher premiums and reduced benefits for American workers and their families. Congress must close the IDR loopholes that are driving up costs for millions of Americans.
Read the full report online here.
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