Employers will likely reduce benefits in 2026 to control benefit costs, according to a Survey on Health and Benefit Strategies for 2026 released by Mercer.
“Employers project average health benefit costs to grow by nearly 6% this year and 2026 may be even more challenging from a cost perspective,” said Ed Lehman, Mercer’s US Health & Benefits leader.
As benefit costs grow, employers face tough decisions regarding their 2026 benefit offerings, according to the Mercer survey.
More employers will likely reduce benefits in 2026. In recent years, the tight labor market and concerns about healthcare affordability have made employers reluctant to raise deductibles or make other changes that put more healthcare costs on employees.
More than half (51%) of large employers, those with 500 or more employees, say they are likely or very likely to make plan design changes in 2026 such as offering plans with narrow networks, or raising deductibles or out-of-pocket maximums. That’s up from 45% in last year’s survey.
Some employers will pursue nontraditional strategies. Thirty-five percent of large employers say they will offer a medical plan option in 2026 such as a variable copay plan. These plans offer no or low deductibles and set copayments for services based on individual providers’ fees. These copays are fixed and communicated upfront, giving members the opportunity to select lower-cost providers, Mercer said.
The survey found that among the 6% of large employers currently offering a variable copay plan, 28% of their employees chose to enroll.
WHY THIS MATTERS
The biggest pharmaceutical concern is the cost of GLP-1 drugs now that use has shifted from diabetes control to weight loss.
Seventy-seven percent of employers surveyed say that managing this cost is the top priority in pharmacy benefits. Sixty-one percent of employers are exploring an alternative to standard pharmacy benefit contracts that would potentially provide greater clarity about the cost of drugs or specific services offered by pharmacy benefit managers.
Employers are balancing the high cost, an estimated $1,000 per month, against the health benefits.
“While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach,” said Alysha Fluno, Mercer’s Pharmacy Innovation leader. “Employers are weighing the immediate costs of covering these drugs against the potential for generating savings down the road once their workforce’s health improves.”
Employers have long covered GLP-1 drugs for diabetes, but only 44% employers cover the drugs specifically to treat obesity.
Well-being and mental health continue to be a priority. More than 75% of large employers will offer digital stress management or resiliency resources in 2026, such as mindfulness and meditation apps, or apps grounded in cognitive behavioral therapy, Mercer said.
Half (51%) will offer in-person or live online resources for stress management and resiliency, such as individual or group training sessions or coaching.
Employers are also providing training for managers on how to recognize employees who are struggling with their mental health. Nearly 40% of all large employers surveyed – and 60% of those with 20,000 or more employees – conduct mental health training for managers.
According to Mercer’s research, nearly half (45%) of U.S. employees feel stressed most days at work.
THE LARGER TREND
The study included 711 United States-based organizations, with 504 having 500 or more employees. The study was done between April 8 and 25.
Email the writer: SMorse@himss.org