Sticker shock is coming for employer health plans in 2026. Here’s why.
An increasing popular class of drugs is fueling a projected hike in health-care costs.
Maudib
By Andy Medici – Senior Reporter, The Playbook, The Business Journals
Aug 14, 2025
Updated Aug 14, 2025 1:57pm CDT
Story Highlights
• Companies project 10% increase in employee health-care costs for 2026.
• Catastrophic claims and specialty drugs drive health-care cost increases.
• Employers plan cost-sharing initiatives to manage rising health-care expenses.
U.S. companies are bracing for double-digit cost increases for their employee health care in 2026.
A new survey from the International Foundation of Employee Benefit Plans found that companies project their median health-care costs will rise 10% next year. That’s up from the 8% increase respondents to a comparable survey last year said they expected for 2025.
The biggest factors driving up health-care costs for employers? According to the survey respondents, it’s catastrophic claims, with 31% identifying that reason, up from 20% last year, followed by an increase in specialty and costly prescription drugs, at 23%, which is up from 20% last year.
For companies that specified that specialty prescription drugs were the primary driver of cost increases, the type of drug cited most frequently is a newly familiar one: GLP-1 drugs, known for treating diabetes and, more recently, a popular weight-loss drug. Fifty-nine percent of employers pointed to that class of drugs, which includes Ozempic, Mounjaro and Wegovy — though that is down from 75% last year. Cancer drugs came in at No. 2, with 50% selecting that classification as a prominent driver of costs, while 21% cited cell and gene therapy drugs. Respondents were able to pick more than one type of drug as a contributor to their projected increases.
“The 10% projected increase is attributed to a variety of factors impacting organizations’ medical plan costs, with catastrophic claims and specialty/costly prescription drugs topping the list,” said Julie Stich, vice president of content at the International Foundation of Employee Benefit Plans. “Employers have indicated that cost-sharing, plan design and purchasing/provider initiatives will be the most impactful techniques to manage costs.”
Employers also weighed in on what types of strategies would be most effective in managing costs in 2026. Among their answers:
• 27%: Cost-sharing initiatives, such as deductibles, co-insurance, copays and premium contributions (up from 21% last year)
• 17%: Plan design initiatives, such as dependent eligibility audits, high-deductible health plans and spousal surcharges/carve-outs (up from 15%)
• 17%: Purchasing/provider initiatives, such as telemedicine, price-transparency tools and health-care navigators/advocates (up from 9%)
• 12%: Utilization control initiatives, such as prior authorization, case management and nurse-advice lines (down from 27%)
GLP-1 class alters care considerations
Employers see health care and health-related benefits as the most important benefit they can provide to their workers, according to the Society for Human Resources’ 2025 edition of its Employee Benefits Survey, ahead of retirement accounts, paid-leave benefits and flexible-work schedules. The survey found that 23% of employers offer GLP-1 drug coverage for type 2 diabetes and/or weight management. The GLP-1 class of medication originally was intended to help patients with diabetes. It has since has been found by the Food and Drug Administration to help with weight loss.
The push for broad inclusion of the class of medicines in health-care plans has become a flashpoint between insurers, employers and workers in recent years.
Coverage expansion by employers to include the drugs is driving up prescription costs, according to research conducted by other organizations, including professional-services firm Aon plc, which estimated a 9% increase in employer health-care costs for 2025. That would mean the cost of employer-sponsored health-care coverage would total more than $16,000 per employee.
Despite workers’ strong demand for GLP-1s, commercial insurance coverage for the drugs has not grown uniformly, with access to Ozempic growing, access to Mounjaro and Wegovy relatively flat, and access to Zepbound shrinking from 2024 to 2025, according to a study by GoodRx.
Rising health-care costs also are once again outpacing overall inflation, according to a Mercer survey of businesses, with health-benefit costs rising 5.8% in 2025, up from 4.5% in 2024. The cost of specialty drugs, including GLP-1s, rose 8.4% in 2024. Employers in the Mercer survey also said they were more likely to plan on raising the employee contribution for their health-care plans, with 51% saying they were likely or very likely to raise employee cost-sharing amounts in 2026, up from 45% who said the same for 2025.
Among employers with 500 employees, 44% said they provided GLP-1 coverage for obesity in 2024, up from 41% in 2023. For companies with more than 20,000 employees, 65% said they provided GLP-1 coverage for weight loss, up from 56% in 2023 — although Mercer stressed that continued cost increases could push employers to reconsider that coverage. The shifting views on drug coverage come as companies reassess other benefits they provide amid a shifting labor market and cost-cutting efforts fueled by economic uncertainty.
Among the changes, the number of job openings advertising child-care support dropped from 17,128 in June 2022 to 3,338 in June 2025 — a decline of nearly 81%, according to data provided exclusively to The Playbook by job-matching platform Adzuna. Job openings advertising emergency child care or backup child-care benefits also dropped, from 15,485 in June 2022 to just 1,720 in June 2025, a nearly 89% decline.