Your health plan renewal probably surprised you — and not in a good way. If your 2025 renewal came in higher than forecast, you’re not alone. The Business Group on Health’s 2026 Employer Health Care Strategy Survey found that actual health care costs exceeded employer projections for the second consecutive year, leaving many organizations starting 2025 at a cost disadvantage they’re still carrying into 2026.
The numbers are real. Employers are projecting a median 9% health care cost trend for 2026. Before any plan design changes, pharmacy costs alone are expected to rise 11–12%. Seventy-nine percent of employers say they’re already seeing increased utilization of GLP-1 medications — and that’s only one piece of a much larger cost puzzle.
If you’re an HR leader or CFO staring at a renewal you can’t justify and a budget that won’t stretch, here’s the uncomfortable truth: rising spend isn’t a strategy. It’s a symptom. The question isn’t whether costs are going up — they are. The question is whether your plan is designed to absorb the increase without breaking your budget or your people.
Here’s a practical framework for the reset your employee benefits plan needs in 2026.
Benchmark First: Know Where You Actually Stand
Before redesigning anything, you need a baseline. Where does your plan sit compared to similar employers in your industry and region?
The average employer-sponsored health plan costs roughly $9,000–$16,000 per employee annually, depending on coverage type and plan design. But averages are dangerous — your plan could be significantly above or below market, and without benchmarking, you won’t know which.
Start with these three numbers:
- Total premium per employee — the full cost your organization pays annually
- Employee contribution share — what your employees pay out of their paycheck
- Cost per claimant — not just averages, but who’s driving the spend
That third number matters most. A small percentage of high-cost claimants often accounts for a disproportionate share of total spend. Without claim-level data, you’re making plan decisions in the dark.
The GLP-1 Question Every Employer Is Asking
There’s no avoiding it: GLP-1 medications like semaglutide and tirzepatide are reshaping employer health costs. According to the Business Group on Health, nearly 8 in 10 employers report increased utilization of these drugs — and the financial impact is significant.
Some employers have carved GLP-1s out of their medical plan entirely. Others have added prior authorization, BMI thresholds, or participation in weight management programs before coverage kicks in. Neither approach is right for every organization, but ignoring the question isn’t an option.
A few options worth evaluating:
- Carve-out strategy — Move GLP-1s to a specialized pharmacy benefit arrangement that separates them from your core medical plan
- Utilization management — Prior authorization, step therapy, and clinical oversight to ensure appropriateness
- Wellness integration — Pair coverage with a structured weight management program to support better outcomes
The goal isn’t to deny care. It’s to make sure your plan dollars are being spent on medications that deliver measurable results, at a cost your organization can sustain.
Pharmacy Costs: The Silent Budget Killer
Here’s a number that surprises most HR leaders: in 2024, 24% of every health care dollar spent went to pharmacy. That’s nearly a quarter of your plan costs driven by prescriptions — and it’s growing faster than medical claims.
The traditional pharmacy benefit model isn’t built for this reality. Rebates that were supposed to lower costs have become unpredictable, and the medications driving the highest spend ( specialty drugs, biologics, GLP-1s) don’t always offer the rebate leverage employers expect.
What you can do:
- Audit your PBM contract — Transparency in pharmacy benefit management is no longer optional. Understand where your dollars are going, what rebates you’re actually receiving, and whether pass-through pricing might work better
- Consider non-traditional PBM models — Newer pharmacy benefit arrangements focus on transparency, lower administrative fees, and reduced reliance on rebates
- Implement clinical management — Prior authorization, formulary optimization, and mandatory generics where clinically appropriate
The pharmacy side of your plan is often where the biggest savings live — but only if you’re willing to dig into the details.
Plan Design Reset: Three Moves Worth Considering
Once you’ve benchmarked and addressed pharmacy costs, the broader plan design question comes into focus. Here are three approaches gaining traction among employers in 2026:
1. Tiered networks with value-based steerage
Not all providers deliver the same outcomes at the same cost. Tiered network designs group providers into tiers based on quality and cost efficiency, and incentivize employees to choose higher-value providers through lower copays and coinsurance.
This approach works best when paired with transparency tools that help employees compare providers before they schedule care — not after they’ve already picked one based on proximity.
2. Health Reimbursement Arrangements (HRAs)
For employers looking to shift some cost responsibility while maintaining flexibility, HRAs offer a structured approach. An employer-funded account reimburses employees for qualified medical expenses or individual health insurance premiums, and unspent funds stay with the employer.
For organizations with employees over 65, a General ICHRA can offer a particularly effective solution — letting those employees apply the benefit toward Medicare options while maintaining coverage for the rest of the workforce.
3. Voluntary benefits as a cost-offset
Critical illness, accident, hospital indemnity, and disability coverage don’t replace your medical plan — they protect employees from the out-of-pocket gaps that your medical plan leaves behind. When employees have voluntary coverage, they’re less likely to delay care due to cost, which can improve outcomes and reduce downstream claims.
Voluntary benefits are typically 100% employee-paid (with payroll deduction), which means they enhance your benefits package without adding direct cost to the employer budget.
The Communication Gap Is Costing You
The Business Group on Health survey identified a persistent challenge: employees often don’t understand the benefits they have. They don’t know their plan includes a health advocate, they don’t use the telehealth option, and they don’t know about the pharmacy discount program.
That gap between what you offer and what employees actually use is a cost driver. When employees don’t know about cost-effective care options, they default to the most expensive path — often an emergency room visit for something a telehealth visit could have handled.
Practical steps:
- Open enrollment education — Don’t just send a benefits guide. Host brief educational sessions (virtual or in-person) that walk employees through their options in plain language
- Year-round communication — Benefits aren’t a once-a-year conversation. Quarterly reminders about available resources, cost-saving tools, and preventive care options keep engagement high
- Decision support tools — Invest in tools that help employees compare plans, estimate costs, and find in-network providers. The easier you make it, the more likely they’ll make cost-effective choices
The Bottom Line
Rising health care costs aren’t a trend you can wish away. But the employers who treat their benefits plan as a strategic asset — not just a line item — are the ones who find room to manage the increase without sacrificing the coverage their employees depend on.
Benchmark your plan against the market. Address pharmacy costs directly. Redesign with intention, not habit. And communicate with your employees so they can be partners in managing costs, not just passengers on a plan they don’t understand.
If you’re not sure where to start, a benefits advisor who specializes in plan design — not just plan placement — can help you ask the right questions before your next renewal.
For more information, visit us at trekis.net or call 888-960-0442.