More Employers Plan to Shift Costs in 2026, Study Finds

As the cost of providing health benefits continues to rise, more employers intend to change or reduce their 2026 offerings to control spending, according to a new survey.

In a survey of more than 700 U.S. employers by Mercer — including over 500 large organizations (those with 500 or more employees) — 51% of large employers said they are likely to make plan design changes in 2026 that would shift some costs to employees, such as modest increases to deductibles or out-of-pocket maximums. That’s up from 45% in 2025.

At the same time, 49% said they would try to avoid shifting costs altogether, reflecting continued sensitivity to employee affordability and satisfaction. Many are looking to minimize premium increases for both the company and employees by fine-tuning plan structures.

Strategies employers are using

To help manage rising costs while supporting employee access to care, employers are considering a variety of plan adjustments:

• Offering copay-based plans with low or no deductibles to reduce upfront care costs.
• Providing larger health savings account contributions to lower-income employees enrolled in high-deductible plans.
• Maintaining free employee-only coverage in at least one available plan (offered by 12% of large employers).
• Extending telemedicine services to part-time or non-benefits-eligible staff.
• Offering medical loans with low or no interest to help employees manage large bills.

Alternative and innovative health plan options

Some employers are also adopting newer plan models aimed at improving cost-efficiency and transparency over the long term, including:

• Variable copay plans. These arrangements adjust copays based on provider costs and allow employees to see prices upfront. While only 6% of large employers offered them in 2025, 35% plan to offer a similar option in 2026. Among those already offering one, nearly 30% of covered workers opted in.
• Exclusive provider organization plans. These plans use a closed network of providers and often offer higher plan value with lower premiums. More large employers are turning to them as a cost-conscious alternative to preferred provider organization plans.
• High-performance networks. These arrangements, often offered by national and regional carriers, steer care toward high-quality, cost-effective providers.

Why costs are climbing

Employers responding to the Mercer survey cited a few key cost drivers:

• Prescription drug spending, which rose 8% in 2024, led by specialty medications and the growing use of GLP-1 drugs for diabetes and obesity.
• Higher provider prices, driven partly by health system consolidation and labor shortages in the health care workforce.
• Increased demand for services, especially as more Americans age into higher-utilization categories.

Average health plan costs are expected to increase by 5.8% in 2025, following a 4.5% rise in 2024.

Enhancing support in other areas

Even as employers look for ways to manage rising expenses, many remain focused on strengthening benefits in areas that support employee well-being, satisfaction and retention.

According to the survey:

• 76% of large employers plan to offer digital stress management tools in 2026, such as mindfulness and meditation apps.
• 51% will provide live or in-person resources for building resiliency and managing stress.
• Nearly one in three employers plan to expand voluntary benefits by 2027, including offerings like pet insurance and employee discount programs.

Many employers are also training managers to recognize signs of mental health issues and direct employees to helpful resources.

What this means for your business

Mercer’s findings show that employers across the country are taking a proactive, balanced approach to managing rising costs while staying focused on supporting their workforce.

We can help you:

• Explore plan design options that preserve affordability.
• Identify cost-saving strategies without sacrificing coverage.
• Strengthen benefits in areas with the greatest employee impact.

With thoughtful planning, it’s possible to keep your benefit offerings competitive and cost-effective, even in a challenging cost environment.