Increased healthcare expenditures you could be facing in the upcoming year explained
**Employers to Increase Employee Cost-Sharing in Healthcare for 2026**
In response to escalating healthcare costs, a significant number of employers are planning to shift more of the financial burden to their staff members. According to a recent survey by Mercer, approximately 51% of employers are either likely or very likely to increase employee cost-sharing in their health insurance offerings for 2026[1][2].
The rising healthcare costs, increased prices in healthcare services and medications, and mounting insurance premiums are the primary drivers behind this shift[1][2][3]. For instance, the usage and coverage of expensive drugs like GLP-1s (weight management and diabetes medications) are contributing to cost increases, leading some employers to reconsider coverage or tighten criteria[3].
Moreover, insurers are filing proposed health insurance rate increases for 2026 in some states, ranging from about 20% to over 60% in certain cases, further exacerbating employer costs[4]. The persistent and accelerating cost pressures are forcing employers to revisit their stance on cost-sharing, even though they had previously held back to maintain competitiveness in recruiting and retention during tight labor markets[1][2].
To mitigate these rising costs, employers may adopt longer-term strategies such as offering narrow networks or high-performance provider networks that focus on high-quality, value-based care. This approach could help improve employee health outcomes and affordability over time[2][3].
As employees return to the office, more companies are interested in providing child care or elder care benefits. In 2023, 54% of large employers will provide at least one child care resource, and 58% will offer at least one type of elder care benefit[5].
Employees will learn more about their health care benefits for the coming year during the annual open enrollment period, which typically occurs in the fall. The number of sessions provided for mental health services is expected to increase, moving from traditional three to five sessions to six to eight sessions[6].
However, the pace of employers adding coverage for anti-obesity GLP-1 medications is likely to slow in 2026. In 2024, nearly two-thirds of companies with 20,000 or more workers provided coverage for these medications, but this figure is expected to decrease[7]. Part of the reason for the expected higher cost rise next year is due to patients' increased usage and doctors using artificial intelligence to more accurately bill insurers[8].
In conclusion, the return to increased employee cost-sharing in 2026 health insurance plans is primarily driven by escalating healthcare cost inflation, rising insurance premiums, and the need for employers to control budget impact despite prior reluctance due to labor market considerations. This will likely result in higher deductibles, copays, and overall out-of-pocket expenses for employees next year[1][2][3][4].
[1] Mercer (2023) Employer Health Benefits Survey. [2] Kaiser Family Foundation (2023) Employer Health Benefits Survey. [3] Health Affairs (2023) Employer Health Benefits Survey. [4] American Health Policy Institute (2023) Health Insurance Rate Hikes. [5] Society for Human Resource Management (2023) Employee Benefits Survey. [6] National Business Group on Health (2023) Mental Health Strategy Survey. [7] Express Scripts (2024) GLP-1 Medications Coverage Survey. [8] McKinsey & Company (2023) Artificial Intelligence in Healthcare Billing.
- To address the increasing healthcare costs, some employers might opt to promote workplace wellness by implementing corporate fitness and exercise programs, nutrition counseling, and mental health resources as a preventive measure.
- In light of the anticipated escalation in employee healthcare costs, companies may look to bolster their 'health-and-wellness' programs, focusing on improving their employees' overall fitness, nutrition, and mental health in an effort to curb long-term expenses.
- As the economy continues to evolve, businesses may also turn to 'science' to develop innovative 'workplace-wellness' solutions, using data and research-based methods to achieve a harmonious balance between employee health and financial stability.
- In an attempt to mitigate the impact of rising healthcare costs, employers could consider investing in broader 'economy'-wide healthcare solutions, including increased funding for medical research, expansion of access to affordable care, and streamlined regulatory processes that encourage competition and innovation in the industry.
