As employers brace for significant healthcare cost increases in 2026, many are seeking out innovative strategies to manage the impact.
This comes from the Business Group on Health’s newly released trends report, which highlights the key issues expected to shape 2026 health benefits and how employers plan to respond.
“A volatile cost environment has been fueled by a complex and fragmented health care ecosystem, and it is faltering,” said Ellen Kelsay, president and CEO of the Business Group on Health, in a statement. “Employers remain committed to providing robust health and well-being offerings, yet they must act swiftly and strategically to manage costs while boosting health outcomes.”
Here are the eight trends the Business Group on Health believes employers should watch in 2026:
1. 2026 is expected to be among the toughest years for affordability in recent years: Employers project a median 9% increase in healthcare costs next year, and a 7.6% increase after they make plan design changes. This comes after two years of actual healthcare costs exceeding forecasts. Multinational employers could see double-digit increases in some regions.
2. Employers will need to “get back to basics”: Chronic diseases are a top cost driver for employers, and this is expected to continue as population health worsens and the workforce ages. This means there will be a larger focus on preventive care, primary care and health screenings.
3. Pharmacy costs will continue to be a challenge: Breakthroughs like cell and gene therapies and weight loss medications are increasing pharmacy expenses significantly for self-funded employers. Due to this, employers are seeking to “disrupt the current role of those along the pharmacy supply chain to drive value for employees,” such as switching up their PBMs, according to the Business Group on Health.
4. Partners will face more scrutiny from employers: Many employers have expanded their partner programs, but these programs often lack data integration and have “inadequate clinical coordination.” That’s why employers are putting their vendor partners under more scrutiny, and partners will need to consistently provide proof that they’re improving outcomes. Employers may end partnerships with those who cannot demonstrate success.
5. Employers will start leveraging alternative models to control costs: Employers will expect their partners to be more innovative. They’ll also be looking to move away from traditional strategies into alternative plans, like copay-based models, virtual-first programs and primary care-centered models.
6. AI will have a major influence on benefits: AI can streamline benefits management and improve care quality and access, but its use by providers to optimize revenue may also drive up costs. This means it will be essential for employers to understand how AI is being applied across clinical settings.
7. A rapidly changing health policy agenda: There are numerous efforts to reform healthcare, including cracking down on PBMs. Federal action could lead to more transparency in the pharmacy space. In addition, the uncertainty from Medicaid cuts and the potential expiration of ACA subsidies may indirectly affect employer plans. Lastly, the midterm election may result in a change to the majority party in the Senate or House, which will slow the pace of legislative changes.
8. Disruption will be essential: Employers will need to convince their leadership and employees to “embrace change.” This is necessary as patients lose trust in the healthcare system, showing a need for disruption, according to the Business Group on Health.
Photo: rudall30, Getty Images
