As the Walt Disney Co. revels in another successful summer—bolstered by the Toy Story franchise’s impressive $1.1 billion global earnings and a lucrative profit-sharing arrangement for Spider-Man films—it has concurrently unveiled significant changes to employee benefits that reflect larger industry trends amidst rising healthcare costs.
Changes to Spousal Health Benefits
Disney employees, including those at its subsidiaries such as Marvel, ABC News, ESPN, and Searchlight Pictures, received alarming news recently: starting in 2027, spouses and domestic partners will no longer be eligible for Disney-sponsored health plans if they have access to their own employer’s coverage. This decision, communicated last week, could have profound implications for the company’s nearly 160,000 employees, known internally as Cast Members.
Corporate Justifications
A company representative stated, “Like a growing number of large employers, we’re making measured adjustments to our employee benefits in response to rising healthcare costs nationwide.” Disney assured employees that they would provide more detailed information about these changes in the upcoming months and emphasized their commitment to offering high-quality coverage and comprehensive benefits.
Implications for Employees and Their Families
While other components of Disney’s Total Rewards package will remain unchanged—such as coverage for employees’ children and access to vision and dental plans—this shift creates a crucial decision point for many families. Those with ongoing medical treatments that extend through 2027 will face a pressing need to evaluate alternative insurance options while also considering the financial implications of any potential switch.
Wider Industry Trends
Disney’s strategy is part of a broader shift occurring across various corporations as they grapple with soaring healthcare costs. According to a recent WTW survey, U.S. employers anticipate healthcare expenses to rise by approximately 11.1 percent in 2027, marking the steepest increase in two decades. By 2025, the average amount paid by employers for employee coverage was $16,818, with employees contributing an average of $3,554, or roughly $296 monthly.
The Rising Cost of Care
These increases are primarily driven by escalating costs related to medical care and medications, notably treatments for cancer and medications for obesity. A survey from the International Foundation of Employee Benefit Plans highlighted that 86 percent of employers noted an uptick in oncology spending from 2024 to 2025, with a median increase of 11 percent. Furthermore, spending on GLP-1 drugs, diabetes medications frequently used for weight loss, surged by approximately 50–65 percent since 2023.
Challenges of Risk Management
Although Disney’s changes may result in some spouses moving off their insurance plans, risk management experts suggest this approach may not effectively alleviate financial burdens. According to Alison Myers, president of Corporate Benefits & Specialty Health at Venbrook Insurance Services, “Spouses make up 50% of the high-cost claims of large employers.” She emphasized that if Disney’s insurance is seen as superior, employees might opt to keep their spouses on the plan despite the higher costs, ultimately continuing to impact the company’s financial outcomes.
Corporate Responses to Rising Costs
Disney is not alone in this reaction to increasing costs. Other companies, such as Starbucks and Zoom, have also made cuts to health benefits. Starbucks has discontinued coverage for GLP-1 medications used in weight loss, while Zoom has reduced paid family leave. Similarly, Deloitte is trimming back on both paid family leave and paid time off, alongside cuts to pension accruals and benefits for adoption, surrogacy, and IVF for specific U.S. employees.
The Broader Impact on Employment and Benefits
As benefit reductions prompt difficult choices for corporate employees, the implications extend beyond mere costs. Myers asserts, “Benefit cost increases are the steepest we’ve seen in years, but the price tag is only one way to measure the cost of care.” The potential loss of valuable employees due to these changes represents a far greater concern for organizations navigating this challenging landscape.
