Health Benefit Trends to Watch in 2026

Employers are heading into what may be one of the most challenging years for managing group health costs.

The new “Trends to Watch in 2026” report by Business Group on Health (BGH) outlines developments that will shape next year’s benefits environment. Rising medical and pharmacy spending, a rapidly changing policy landscape and increased pressure for innovation may pressure employers to revisit long-standing strategies and consider new ones.

Below are six trends the report predicts will affect health plans.

1. Affordability pressures intensify

Employers project a median 9% increase in health care costs for 2026, dropping to 7.6% after plan design adjustments. These increases follow two years of costs that ran higher than expected, signaling that inflationary pressure has become a persistent challenge.

Chronic conditions, an aging workforce, higher medical and pharmacy prices and ongoing system fragmentation all contribute to the strain. As a result, employers may need to weigh short-term mitigation tactics against longer-term structural changes, including program reductions or redesigned plan approaches.

2. Emphasis on preventive care and primary care

With chronic disease remaining the top cost driver, employers are expected to “get back to basics.” That means increasing the focus on preventive care, evidence-based screenings and stronger primary care engagement.

Many organizations will also reassess well-being and chronic-condition programs to ensure they produce measurable results. Incentives or alternative plan designs that encourage screenings, primary care use or condition management may become more common as employers push to improve long-term health trends.

3. Pharmacy costs will continue to weigh

Drug spending is one of the fastest-growing costs, driven by GLP-1 drugs, gene and cell therapies and broader price inflation. Existing mitigation strategies are losing effectiveness, prompting employers to re-examine pharmacy benefit manager (PBM) relationships, transparency, contracting terms and utilization controls.

The rise of direct-to-consumer cash prices adds another layer of complexity, as employees may seek lower-cost options outside the plan. Employers will need a clear stance on whether to support or discourage such use.

4. Streamlining and tightening vendor partnerships

As a result of years of adding new programs, many employers now face fragmented, duplicative services and inconsistent data integration. In 2026, the report predicts that employers will place vendors under greater scrutiny and focus on measurable outcomes. Vendors will be expected to improve data sharing, coordinate care with other partners and demonstrate value.

5. Faster adoption of alternative plan models

To manage rising costs, employers will continue to explore new plan structures. Options such as copay-based designs, virtual-first plans, primary care-centered models and network-less structures are gaining traction.

We can help you compare these models with traditional preferred provider organization, health maintenance organization and high-deductible health plan options.

6. Shifting policy landscape adds uncertainty

PBM reforms, updated preventive care guidelines and new chronic-disease coverage policies may influence employer plan design. Potential ACA subsidy expirations and ongoing Medicaid eligibility changes could increase reliance on employer coverage.

With the 2026 midterm elections approaching, legislative action may slow while regulatory activity increases. Employers will need to monitor these developments closely to anticipate compliance obligations and communicate changes to employees.

Takeaway

If the BGH report is accurate, many employers will be looking for ways to cut costs, boost vendor accountability and explore new plan structures.

If you are interested in alternative plan models, we can help you compare them with preferred provider organization, health maintenance organization and high-deductible health plan options.