2026 health plan changes

Companies plan to evaluate disruptive changes to their health care plans as the cost of health care in the U.S. rises to the highest point in over two decades, according to recent research from WTW. The 2025 Best Practices in Healthcare Survey found that U.S. employers project their health care costs, before plan changes, will increase by 9.1 percent in 2026, compared with 8.1 percent in 2025 and 7.0 percent in 2024. The trend after plan changes is 8.0 percent, 7.0 percent and 6.0 percent, respectively.

Cost pressures have prompted one in three employers to consider making significant changes to their health care programs within the next three years. According to the survey, employers identified their top drivers of health care costs as: (1) pharmacy costs, primarily specialty pharmaceuticals and GLP-1 medications; (2) high-cost claimants; and (3) chronic conditions, especially musculoskeletal and cancers.

To tackle these financial challenges, employers’ top priorities over the next three years are company medical costs, company pharmacy costs and affordability for employees. Following these primary concerns, they are prioritizing employee wellbeing, employee experience, and health care delivery to round out their health-focused strategies for 2026.

While cost-shifting strategies continue to assist in controlling employer health plan costs, companies are managing their program costs by other means. WTW found that 59 percent of employers intend to implement broader cost-savings actions in the next three years versus 46 percent in the past three years. Employers are prioritizing changes to program subsidies, adoption of alternative plan designs, improving vendor or operational efficiency, and utilization of more effective steerage or behavioral requirements. To address the rising impact of chronic conditions, employers cite the need to expand clinical programs, especially in areas such as cardiovascular health, musculoskeletal health, digestive health, obesity, and oncology.

“Fewer employers are absorbing rising costs because it’s becoming too expensive. They’re also avoiding aggressive cost-shifting because it can affect employee health, satisfaction, and retention. Instead, employers are looking to bold disruptive changes that control costs and improve health to create a more sustainable path forward,” said Tim Stawicki, chief actuary of health and benefits at WTW.

Employers’ approaches to reduce unnecessary medical expenses include managing vendor contracts, conducting audits, and preventing overutilization and abuse of services, noted the survey. Almost half (46 percent) of companies are evaluating vendor performance, and more than one-third (36 percent) have taken medical plans out to bid with another 50 percent planning to do so. In addition to these initiatives, 33 percent of companies have conducted medical claims audits to increase efficiency with another 44 percent planning to do so, and 22 percent have conducted reviews of prior authorizations or evaluated qualifying payments for out-of-network services with another 34 percent planning to do so.

Alternative plan designs, currently used by 41 percent of companies, are becoming a popular, proactive way to address health and rising costs. These plans focus on attributes such as alternative or select providers, price or cost transparency, enhanced navigation, expanded use of member-facing technology and advanced or high-performance primary care. Almost half (46 percent) of companies are planning or considering implementing these attributes in the next two years, which would result in 87 percent of employers utilizing such approaches.

Diminishing net promoter scores (NPS) captured in the survey indicate that employers are frustrated with their PBM’s performance. As a result, they are re-evaluating their PBMs for increased governance and transparency. Three-quarters (75 percent) of employers have or will take their pharmacy benefits manager out to bid, more than half (58 percent) have recently audited their pharmacy benefits, and nearly half (49 percent) use transparent and pass-through contract structures, with another 22 percent planning or considering doing so.

Greater use of GLP-1 medications for obesity is being assessed, as well. While 57 percent of employers cover GLP-1s for weight loss, WTW found that 15 percent of employers are either considering removing coverage or have already done so in the past year. Key tactics being considered by employers to manage GLP-1s for obesity include required participation in a lifestyle management program, 30-day fill limit, step therapy, higher cost sharing and different coverage/BMI criteria than the PBM standard. Notably, more than three-quarters (78 percent) of employers that do not currently cover GLP-1s would do so if costs were lower.

Artificial Intelligence is beginning to take hold with health care benefits. While just 21 percent of employers use AI moderately or extensively in their health care programs today, 80 percent believe it will fundamentally change the way health care benefits are managed, communicated, and delivered in the next three years. Employers see the greatest opportunity for AI in health care in the areas of navigation and personalized decision support, tools to improve employee experience, communication for benefits, and evaluating health care vendors.

“Employers must take a more revolutionary approach to address both immediate cost pressures and long-term cost trends, especially since health care costs appear firmly on an upward trajectory. At the same time, employers seek innovations in clinical programs, technology, and effective uses of AI in health care to address the burden of chronic disease and to help people protect their health,” said Courtney Stubblefield, managing director of health and benefits at WTW.

SOURCE: www.wtwco.com

From WCI's HR Answers Now ©2025 CCH Incorporated and its affiliates. All rights reserved.