Employee Benefits: What Organizations Could Expect in 2026
•February 17, 2026
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Companies Mentioned
Why It Matters
Escalating benefit expenses threaten talent attraction and profit margins, while AI and holistic wellbeing programs reshape how organizations compete for and retain staff.
Key Takeaways
- •Health plan costs rise sharply in 2026
- •AI tools aid benefits selection, raise privacy concerns
- •Wellness programs shift toward preventive, mental, financial health
- •Brokers essential for benchmarking and data‑driven benefit design
- •Specialty drug prices drive major expense growth
Pulse Analysis
The 2026 employee‑benefits outlook underscores a perfect storm of cost pressures that CEOs can no longer ignore. Prescription drug inflation—especially specialty therapies and GLP‑1 agents—has become a primary cost driver, while an uptick in catastrophic claims such as cancer treatments adds volatility to claims budgets. Simultaneously, provider shortages and broader inflation push medical service fees higher, forcing employers to allocate larger portions of their compensation budgets to health coverage. Companies that fail to anticipate these trends risk eroding profit margins and losing competitive advantage in talent markets.
Artificial intelligence is emerging as a double‑edged sword in benefits administration. Sophisticated AI decision‑support platforms can parse complex plan designs, match employee health profiles with optimal coverage, and streamline enrollment, delivering measurable efficiency gains. However, the pervasive use of AI also raises confidentiality concerns; without clear data‑governance policies, sensitive personal information could be exposed. Organizations must therefore balance the productivity benefits of AI with rigorous privacy safeguards, ensuring that employee trust is maintained while leveraging technology to enhance benefits experiences.
Beyond cost containment, the benefits landscape is shifting toward a more holistic employee wellbeing model. Employers are investing heavily in preventive health programs, mental‑health resources, and comprehensive financial‑wellness coaching that ties retirement planning to broader financial health. This integrated approach not only improves employee productivity but also reduces long‑term claims costs. Benefits brokers play a pivotal role, offering market benchmarking, employee sentiment analysis, and data‑driven recommendations that align plan design with strategic business goals. By partnering with knowledgeable advisors, firms can craft competitive, sustainable benefits packages that attract talent while protecting the bottom line.
Employee Benefits: What Organizations Could Expect in 2026
Estimated reading time: 8 minutes
One of the biggest features in the employee value proposition (EVP) is benefits. Organizations design benefit packages to recruit, engage, and retain employees. Job seekers make decisions about the organizations they will apply to and accept offers from – in part, because of benefits. Bottom-line: employee benefits are important.
Employee benefits are also expensive. So, organizations have to manage what they offer. Benefits can also be expensive for employees, with cost sharing, etc. Knowing the benefits landscape can help both employers and employees get the most out of benefits offerings.
Our friends at HUB International recently published their 2026 Employee Benefits & Retirement Outlook. It’s a great read – definitely worth the download. I asked if they would chat with me about some of the insights from the report. Thankfully they said yes. Multiple people weighed in during this interview.
Matt Escalante, CFP®, Senior Vice President, HUB FinPath Financial Wellness
Cory Jorbin, Esq., Senior Vice President, Employee Benefits Compliance Practice Leader
Anthony Scott, Chief Consulting Officer & Central Employee Benefits President
Fran Scott, National Health & Performance Strategy Leader
And a quick reminder that today’s comments shouldn’t be construed as legal advice or as pertaining to any specific factual situations. If you have detailed employee benefit questions, they should be addressed directly with your friendly neighborhood benefits broker or labor and employment attorney.
Thanks everyone for being here. Let’s start with the question on everyone’s mind. Employee benefits are a big advantage for employers (in attracting and retaining employees). They can also be a big expense. Give us a high-level picture of what employers should expect when it comes to employee benefits expenditures for 2026?
Anthony Scott Employers faced some of the highest health plan increases in recent years.
The 2026 benefits plan year has brought larger health plan increases than what we’ve seen over the past several years, making benefits costs an even more pressing concern for employers trying to manage their budgets while remaining competitive.
Outside of salaries themselves, employee benefit expenses represent one of the highest costs employers incur, with health plans being the primary driver of total benefits spending. The key cost drivers for 2026 include:
Prescription medications are a major driver. The rising cost of pharmaceuticals, particularly specialty medications and GLP-1s, has significantly contributed to the increases employers are experiencing.
Employers are seeing an uptick in large catastrophic claims, with cancer treatments being a particular area of concern due to both the frequency of claims and the severity of costs associated to manage these conditions.
Healthcare provider costs continue to climb. The healthcare industry itself is under pressure from higher salaries, provider shortages, and broader inflation, which increases the cost to treat patients. This has led to more aggressive negotiations between medical insurance carriers and providers, as well as continued consolidation among healthcare organizations to drive efficiency while giving them more leverage against insurance networks.
Employers have prepared for meaningful budget increases in their benefits line items for 2026, while also thinking strategically about alternative strategies that will allow them to better control costs, provide improved access to quality healthcare, and continue to offer competitive benefits. This is critical from a sustainability perspective as employers and employees share in the cost of health plan expenses.
One topic that I read about every single day is artificial intelligence (AI). In HUB’s 2026 Employee Benefits Outlook, AI is mentioned. What can employers – and employees – look forward to when it comes to benefits and AI? And conversely, is there anything employers – and employees – should be cautious about?
Cory Jorbin Employers and employees alike can look forward to more AI powered decision support tools in 2026 and beyond. These tools are designed to help employees choose the plan options that best meet their needs. As these tools become more sophisticated, they become more accurate. This benefits employers and employees.
In addition, employers and employees should understand that AI is everywhere which means they need to work to understand how any particular AI tool is actually using AI. This includes understanding what confidentiality (if any) exists when information is shared with AI. Absent assurances that information shared with an AI tool is confidential, employers and employees should assume such information is not confidential.
When you think about benefits, like health care, there are often two approaches. Reactive, meaning that I have benefits that will help me when I’m sick or injured. And proactive, benefits that allow me to focus on my wellbeing. Many organizations have adopted wellbeing programs over the past few years. Will we see more investment in employee wellbeing? If so, in what areas?
Fran Scott We’re seeing continued investment in employee wellbeing with over 80% of large employers offering programs and support to their employees. H&P’s 2026 trends highlighted a big return to focus on preventive care due to the high renewals many groups have faced over the last two years. A great way to think about prevention is with this framework:
Primary prevention is avoiding health related issues before they might start by adopting a healthy lifestyle. Approximately 80% of chronic illness is the result of these lifestyle factors: eating a healthy diet, getting enough physical activity, abstaining from tobacco, limiting alcohol, and managing stress.
Secondary prevention is screening and early detection so that risk factors can be identified before they get even more problematic and expensive (stopping the clinical cascade). This includes all the age and gender specific cancer screenings such as mammograms, colonoscopy, pap smears, annual physicals, and dental exams.
Tertiary prevention is managing a condition that’s already developed. The goal of programs like diabetes, hypertension, weight management, or physical therapy is to slow progression, prevent complications, restore function, and improve quality of life.
Other areas of CONTINUED focus of employer wellbeing programs include mental health and financial wellbeing. The Telus Mental Health Index has indicated the US’ collective ‘strain’ since the pandemic, and rates of substance use disorder and more serious mental health issues such as depression and anxiety are ticking up. Financially speaking, according to a PWC study, 68% of US workers state that financial stress negatively impacts their mental health.
So yes, employers are leaning in to supporting employee wellbeing. And health and performance can help those that are just getting started to those that are ready to be very strategic.
We’ve all read the news and have seen the articles about economic uncertainty. When it comes to employee benefits, I have to think employees see those articles and wonder about retirement. Should employers expect changes in the areas of financial wellbeing and retirement planning – whether that’s in plan design or participation rates?
Matt Escalante Financial wellbeing programs are poised for even more significant evolution. The integration of holistic financial coaching—addressing everything from emergency savings and debt management to retirement readiness—is moving from ‘nice to have’ to ‘must have’. Employees are increasingly vocal about financial stress affecting their productivity and overall wellbeing, and forward-thinking employers are responding with comprehensive solutions rather than piecemeal approaches.
The key shift will be in how these two areas converge. Smart employers are recognizing that retirement planning doesn’t exist in a vacuum—an employee drowning in credit card debt or lacking emergency savings won’t maximize their 401(k) contributions, no matter how generous the match. We’ll see more plan sponsors pairing their retirement offerings with broader financial wellness resources, creating a more integrated approach to employee financial health.
Last question. If employers are concerned about the competitiveness of their benefits offering, is there something they can do? Can a benefits broker help them identify opportunities to strengthen their offering?
Anthony Scott Absolutely. A benefits broker can be instrumental in helping employers understand and strengthen their benefits offering, especially in today’s challenging cost environment.
Benchmarking is the essential first step. Most employers want to understand how their benefits stack up against peer groups and the organizations they compete with for talent. Brokers, consultants, and third-party advisors can provide comprehensive assessments of how competitive an employer’s benefits program is in terms of plan design, cost, and the range of benefits offered. This market intelligence is critical for identifying gaps and opportunities.
But benchmarking is only half the equation—employee input is crucial. Once employers understand where they stand relative to the market, the next step is obtaining direct feedback from their workforce through surveys, conjoint analysis, and other engagement tools. This reveals what employees truly value in their benefits package, allowing employers to maximize their value on investment (VOI) while optimizing return on investment (ROI). After all, offering benefits that employees don’t use or appreciate is wasted spend and resources.
Data-driven decision making makes the difference. A trusted advisor should go deeper by analyzing the employer’s specific data—demographics, utilization patterns, risk profile, geography, claims history, and more—to determine which benefits and solutions will be most utilized and effective for that workforce. This data-driven approach enables employers to make smart financial trade-offs, investing in benefits that truly matter while eliminating or reducing spending on offerings that don’t resonate or aren’t effective.
Employers don’t have to navigate these challenges alone. A skilled benefits broker serves as a strategic partner who combines market intelligence, employee insights, data analytics, and experience to help you remain competitive while managing costs effectively.
A HUGE thanks to the HUB team for sharing their insights with us. For more detail, be sure to check out HUB’s 2026 Employee Benefits & Retirement Outlook.
One of my takeaways from today’s article is that both employers – and employees – need to learn about how to design a benefits offering that works. I’ve mentioned before that I was involved in an auto accident years ago and I was very lucky that I had a good benefit package. It also made me very aware that I needed to know the details of how it worked.
I don’t think it’s unreasonable to think we could see more employee benefits changes in the months and years to come. If that’s the case, then it’s more important than ever to understand what’s going on and how it impacts the organization and employees.
The post Employee Benefits: What Organizations Could Expect in 2026 appeared first on hr bartender.
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