Self-funded employers are facing the brunt of costs associated with the No Surprises Act (NSA) arbitration process, a new report from the ERISA Industry Committee (ERIC) found.
The report (PDF)—entitled Employer Exposure Under the No Surprises Act—was in part informed by confidential interviews with larger self-funded employer plan sponsors.
Employer-sponsored insurance covers approximately 154 million non-elderly Americans, with 67% of covered workers enrolled in self-funded plans, according to the report. With firms of 200 or more employees, the share is 80%.
In Independent Dispute Resolution (IDR) cases, employers fund outcomes, the report notes.
“This is no trivial matter,” analysts wrote. “As IDR payouts reach upwards of $15 billion dollars throughout the life of the program, the direct cost to employers is quickly becoming untenable.”
One plan sponsor interviewed for the report saw payments associated with the IDR process increase from approximately $3.5 million in 2025 to more than $6 million during the first half of 2026.
The employer is on pace for payments to exceed $12 million for the full year.
Another interviewed employer projected IDR payments alone could account for 5% to 6% of total healthcare spending in 2026, with another estimating payments are adding 1% to 3% of the annual healthcare trend.
Employers reported that IDR outcomes can be difficult to forecast, and impossible to mitigate, with one sponsor describing arbitration decisions as "functionally random." Many employers interviewed for the report also noted sponsors cannot “reliably determine” what IDR is costing them, which providers are driving the claims or whether parties negotiating on their behalf are “optimally engaging in the process.”
The report shows that IDR awards are no longer a marginal backstop for rare billing disputes. Instead, employers described the process as an increasingly costly and opaque line item in their health plan budgets, one they often cannot predict, audit, or control, the analysts wrote.
Analysts put forth several policy recommendations, including:
- Restoring the “intended role” of qualifying payment amounts (QPAs)
- Establishing a limited appeals mechanism
- Addressing volume abuse
- Enacting transparency reform
Total costs associated with the IDR process reached $22.4 billion at the end of 2025, according to an analysis from the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.
“Employers are shouldering these unintended, unsustainable costs, and we are shouting from the rooftops about the need to fix this system,” said James Gelfand, ERIC president and CEO, in a statement. “Our member companies work tirelessly to be good stewards of employees’ health care dollars and protect them from unnecessary costs. An arbitration process with no basis on real prices, no brakes, and no way to appeal is making that job impossible.”
Gelfand added the report gives lawmakers the “opportunity to hear directly from the employers funding this system, not just the industries profiting from it.”
In June, the Congressional Budget Office (CBO) issued a call for more research into the NSA to evaluate the law’s effect on healthcare prices and network participation.
The agency originally estimated the legislation would reduce in- and out-of-network prices, in turn reducing premiums insurers charge by roughly 1%. CBO notes that projected estimated savings were partially offset by several factors, including increased spending by insurers on newly covered out-of-network care, greater healthcare services utilization and administrative costs.