Horizon Blue Cross Blue Shield of New Jersey will lay off 242 employees beginning April 26, as the state's largest health insurer grapples with what it described as "unprecedented financial challenges" stemming from rising medical costs and increased utilization across all lines of business.
The reduction, disclosed in a Worker Adjustment and Retraining Notification filed with the New Jersey Department of Labor and Workforce Development, represents approximately 4% of the insurer's 5,500-person workforce.
The layoffs come amid broader strain on the US health insurance sector. AM Best revised its outlook for the industry from stable to negative in August 2025, citing increased utilization and rising medical costs.
Bridget Maehr, director at AM Best, said operating performance is expected to remain pressured through 2025, with challenges likely continuing into 2027 as insurers may need several pricing cycles to address current conditions.
Horizon BCBS said it has reduced operating costs by US$275 million over the past three years in response to growing care expenses.
A company spokesperson said to AM Best the current cost structure "is simply not sustainable in this environment," adding that the insurer has "a responsibility to our customers and members to ensure the long-term financial strength of the company."
Horizon BCBS is not the only Blue Cross Blue Shield affiliate to reduce headcount in recent months. BlueCross BlueShield of Tennessee announced plans in September 2025 to lay off about 95 employees and eliminate 28 vacant positions, also citing rising claims costs.
Horizon BCBS first notified employees in November 2025 that a restructuring would take place in early 2026, with plans to eliminate approximately 300 positions. On January 26, affected employees were informed that their roles had been cut as part of the restructuring.
When accounting for all workforce actions, the insurer said it has reduced its total headcount by roughly 8%.
"We do not take workforce reductions lightly," the spokesperson said. "Employees whose positions were eliminated were treated with fairness and respect and will receive a generous separation package."
