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.
Health insurers pledged in June 2025 to overhaul their processes as part of a Trump administration initiative to reduce the volume of prior authorization requirements and modernize how requests are handled.
Many insurers targeted Jan. 1, 2026, for measurable reductions, but how far have they gotten? While carriers say they are making progress, provider groups such as the American Medical Association contend that little has changed for patients and clinicians on the ground.
This tension matters to employers and HR executives who sponsor group health plans because prior authorization rules influence employee access to care, administrative costs and satisfaction with their health benefits.
Why prior authorization became a flash point
Prior authorization — or prior approval — requires clinicians to secure insurer signoff before performing procedures, prescribing certain medications or ordering tests. Plans say it helps control unnecessary or low-value care.
Providers argue that approvals can take hours or days, even for routine services, leading to delayed diagnoses or treatment. News reports of patients waiting for life-saving care, sometimes with tragic outcomes, have intensified scrutiny.
The June 2025 pledge aimed to blunt these concerns and respond to growing state and federal pressure to simplify the process. Most major insurers pledged to:
Cut the number of medical services needing prior authorization, particularly common procedures like colonoscopies and cataract surgeries, by Jan. 1, 2026.
Honor existing prior authorizations for 90 days when a patient changes insurers mid-treatment.
Offer clearer explanations for denials and ensure all denials receive a medical review.
What the largest insurers are doing
UnitedHealthcare — The company dropped prior authorization requirements for 231 procedures in December 2025, including nuclear medicine studies, certain obstetrical ultrasounds and electrocardiography procedures. It previously reduced approval requirements for services with consistently high adherence to evidence-based guidelines.
Cigna — Cigna has eliminated prior authorization for nearly 100 services, added real-time status tools and expanded patient support teams that help members navigate approvals.
Humana — The insurer says it eliminated about one-third of outpatient prior authorizations, including for colonoscopies and certain imaging studies. It has committed to issuing decisions within one business day for at least 95% of complete electronic requests starting Jan. 1, 2026, and is working to automate approvals for most routine requests.
Aetna — Aetna is in the process of automating one in four PA approvals for near-instant decisions and using AI tools to help members navigate the system. It has started bundling multiple prior authorization requests for cancer imaging into single submissions and has expanded bundling to musculoskeletal services, certain surgeries, medications and related care.
Blue Cross Blue Shield plans — The association says BCBS plans around the country are reducing requirements and preparing January 2026 workflow changes. More detailed reporting is expected in spring 2026 as part of an industrywide dashboard.
State policy activity accelerates
States have become increasingly aggressive in regulating prior authorization, shaping reforms employers may encounter in the coming years. Recent actions include:
Arkansas, West Virginia and others have implemented programs that exempt high-performing physicians from prior authorization requirements.
Vermont requires 24-hour urgent decisions, while Virginia mandates 72-hour expedited reviews.
Indiana, Delaware and Oklahoma have instituted professional review standards, requiring denials to be reviewed by clinical peers or physicians with specialty expertise.
Maryland and Washington have instituted electronic submission mandates.
Wyoming and other states have implemented continuity-of-care protections that require new insurers to honor existing approvals from a prior insurer for a specified period.
Maine, Colorado and Alaska have codified transparency requirements, such as public reporting of approval and appeal data, clearer notices and mandated appeal instructions.
These state reforms, coupled with new federal timelines for Medicare Advantage and Medicaid starting in 2026, signal that regulatory pressure is likely to intensify.
Takeaway
Health insurers have pledged meaningful reductions in prior authorization, and the industry is watching to see what kind of changes they implement in 2026. The result should hopefully improve the health care experience for your employees, particularly those who have ongoing health issues that are expensive to treat.
Choosing the right dental insurance plan for your employees is always filled with compromises and difficult decisions, no matter if this is the first time you offer a dental plan at your company or you are just revising the benefits currently on offer.
The process becomes even more difficult when you look into the variety of options and types of dental benefits there are today. Here’s some information to help simplify the situation:
Coverage types
There are three basic types of dental coverage employers typically offer:
Indemnity plan — These fee-for-service style plans are the most common type. They require employees to pay monthly premiums to the insurance company, which agrees to reimburse dentist offices for the costs of the services provided.
What makes these plans so popular is the freedom that covered individuals have in choosing their own dentist. Fee-for-service plans cost more than other plans, but many people are willing to pay more to retain the ability to choose their own practitioner.
Preferred provider organization — PPO dental plans are less expensive than indemnity plans, while still providing a large pool of dentists to choose from. Individuals covered under PPO plans are given the choice of receiving care from any provider within the plan’s dentist network or choosing a non-network dentist and paying a little more in out-of-pocket expenses.
Dental health maintenance organization — A DHMO is the least expensive type of plan. Covered individuals are given an even smaller pool of in-network dentists and may not receive coverage if treated at a non-network facility. DHMOs are able to cut costs by placing a strong focus on preventative care and by offering a selective number of dentists to choose from.
Services covered
Besides choosing one of the three styles of dental insurance, the employer must decide on a benefits program that covers specific services. For example, some plans are comprehensive and cover everything from preventative care to major procedures, while others only cover preventative services.
In dental terms, preventative care refers to semi-annual check-ups and cleanings, yearly x-rays, and fluoride treatments and sealants for children covered under the plan. Basic dental care would refer to basic oral surgeries and restoration procedures. Major dental care refers to root canals, extractions, crowns, prosthetics and advanced surgeries.
Dental plans can also be customized to include services like orthodontics and cosmetic dentistry procedures through the use of riders and options. For a small fee, supplemental services can be added to bulk up basic coverage plans.
The takeaway
When facing such an important decision, numerous factors play into your choice. You must juggle the wants and needs of your employees with the cost and range of each plan. Is it better to have choices or to pay less in premiums?
The more communication you have with your staff, the better you will understand how to formulate a dental insurance plan that meets their expectations.
By promoting good oral health within the workplace and through a benefits program, you will be doing a great service to your employees and your business.
The oldest Gen Z workers and youngest Millennials who are just entering the workforce face a steep learning curve when selecting group health plans coverage and are increasingly turning to apps, the internet and family for advice, according to a new report.
The survey by Justworks and The Harris Poll found that the youngest workers experience the greatest stress during open enrollment, lean heavily on AI tools and social media for guidance and rarely ask their employer’s HR team for help.
For employers, the findings highlight a widening generational divide in how workers research, understand and engage with health benefits. Employers will need to account for this new generation in their communications and support services.
Research habits are changing
Despite their concerns, nearly 60% of Gen Zers spend an hour or less reviewing benefits.
Their methods also differ sharply from older generations.
62% have used AI tools, including ChatGPT, to help interpret plans.
30% turn to TikTok and other social platforms for advice.
Younger Gen Zers are more likely to call a parent than consult HR.
11% ask a benefits manager for help.
This contrasts with Millennials, who rely more on Google and Gen Xers and Boomers, who tend to use employer resources. The report also found that zillennials value quick, tech-first explanations and tools that compare plans in simple terms.
Lack of understanding
According to the survey, about 26% of Gen Z workers say affordability is their biggest concern when choosing a plan. That angst is compounded by the fact that many are making these decisions for the first time as they roll off their parents’ coverage.
Here’s what the survey found about the oldest Gen Zers and youngest Millennials:
52% say they don’t know much about choosing an insurance plan because they’ve never had to do it before.
20% say they aren’t confident about picking a suitable plan.
44% don’t put much thought into the process.
The oldest Gen Zers and youngest Millennials also report uncertainty about which questions to ask during open enrollment or who to approach for answers.
This further pushes them toward AI, online communities and social media, where health insurance advice is often incomplete, biased or incorrect.
What employers can do
As more Gen Zers enter the workforce, they will likely have the same habits as those identified in the survey. The stakes are even higher as rising medical costs make it more important for workers to choose appropriate plans.
The survey suggests several steps employers can take to help the youngest workers make better decisions:
Provide short, simple explainers rather than long benefits guides.
Use clear comparisons that highlight key differences between plans.
Offer examples tied to situations younger workers understand, such as renters or auto insurance.
Ask workers directly whether they are consulting TikTok, Instagram or AI tools for guidance and what kind of advice they’ve gotten.
Correct misinformation before open enrollment begins.
Encourage employees to bring questions to HR instead of relying solely on outside sources.
Because social platforms contain a significant amount of inaccurate benefits content, it’s useful for HR teams to check in early and clarify what is and isn’t true. Employers may also want to incorporate AI-enabled tools into their own communication strategy, giving staff a trusted version of technology they already use.
The oldest members of Gen Z are signaling that they want simpler information, faster answers and digital guidance that matches how they already learn. Employers that adjust their communication to meet these expectations can help younger workers feel more confident in their choices — and reduce costly mistakes during open enrollment.
New federal guidance announced Oct. 16, 2025, could make it easier for companies to add or expand fertility support for workers without having to fold it into their major medical plans.
The guidance, a new set of FAQs issued by the Departments of Labor, Health and Human Services and Treasury, spells out how infertility benefits like in vitro fertilization and hormone therapy can qualify as “excepted benefits,” a category of coverage that’s not subject to Affordable Care Act mandates. The guidance was in response to an executive order issued by President Trump in February 2025.
Under the ACA, most employer health plans must follow strict coverage and reporting rules. But certain benefits — such as dental, vision, FSAs, HRAs, EAPs and hospital indemnity plans — are “excepted,” meaning they’re exempt from the ACA’s mandates on preventive care, annual dollar limits and other requirements.
Three options
Under the new guidance, employers have three ways to structure fertility benefit coverage:
1. Separate, insured fertility policy — Employers can now buy a fully insured policy that covers infertility care as its own benefit. To qualify as an excepted benefit, the policy must:
Be issued under a separate insurance contract.
Not coordinate with the company’s main health plan.
Pay benefits regardless of what the health plan covers.
This lets employers extend fertility coverage to all workers, even those not enrolled in the medical plan. Self-funded programs don’t qualify under this option.
2. Excepted benefit HRA — An employer could reimburse out-of-pocket fertility expenses through an “excepted benefit” HRA if it meets federal limits. To qualify, the HRA:
Must be offered alongside a traditional group health plan.
Can reimburse up to $2,200 in 2026 (indexed annually).
Can’t reimburse insurance premiums.
Must be offered on the same terms to similarly situated employees.
It’s a smaller-scale solution but can help offset costs for staff pursuing fertility treatment.
3. Employee assistance program — Employers can use an EAP to offer coaching or navigator services that help workers understand their fertility options or find providers. The EAP cannot provide “significant” medical care or be tied to the main health plan, and participation must be free and voluntary.
This option doesn’t pay for treatment but adds support for staff exploring fertility services.
Examples of fertility benefits
Depending on the setup and insurer, fertility coverage may include:
Diagnostic testing and consultations
Fertility drugs and hormone therapy
Procedures such as in vitro fertilization or intrauterine insemination
Egg, sperm or embryo storage
Donor services or gestational carrier expenses
Coaching, navigation or second-opinion services
Employers that already cover fertility care under their medical plans can continue to do so, but the new guidance gives more flexibility for those wanting to offer coverage to a broader workforce.
Takeaway
The new FAQs are informal guidance that expands on existing rules rather than creating new legal avenues for fertility coverage.
The agencies also stated they intend to propose regulations that could add more ways to offer infertility benefits as limited excepted benefits and may revisit standards for supplemental coverage.
If you offer or plan to offer fertility benefits, be alert for upcoming rulemaking and review designs with counsel to keep your offerings ACA-exempt and compliant.
A new survey from America’s Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association (BCBSA) is raising alarms about widespread abuse of the federal Independent Dispute Resolution process set up under the No Surprises Act.
According to the findings, nearly 40% of disputes filed through the system in 2024 (the year the law took effect) were ineligible, yet many still advanced through arbitration, forcing employers and health plans to pay unnecessary or inflated claims. Many of these claims are driven by private equity-backed health care providers and not individual health plan enrollees, according to the survey.
According to Kim Keck, president and CEO of BCBSA, the volume of dispute resolution cases has exceeded expectations and is clogging up the system. Many decisions are made despite evidence that the claim is ineligible for compensation.
What the survey found
The survey, which polled health plans covering 154 million Americans, found that:
40% of all disputes were identified by insurers as ineligible, including 45% of nonemergency service disputes.
Only 17% were ultimately deemed ineligible by the federal arbitration entities, meaning more than half of improper cases still resulted in binding payment determinations. This suggests that the referees in the IDR system are failing to identify a large volume of ineligible disputes submitted by providers.
20 million claims were filed in 2024, with emergency services making up about 61% of the total.
Air ambulance claims, though fewer than 1% of submissions, were the most likely to reach arbitration and involved high-dollar payouts.
Bright spots
While the survey identified potential abuse in the system, it also found evidence that it works in legitimate cases:
In 2024, nearly 20 million health care claims met the criteria for federal surprise billing protections, meaning nearly 20 million surprise bills were prevented in 2024.
Three out of four claims were paid without further dispute when providers accepted the plan’s initial payment.
Once arbitration decisions are issued, plans pay nearly three-quarters of arbitration awards within 30 days; 41% were paid in just 15 days.
When delays occurred for qualified IDR items or services, they were most often due to provider submission errors (e.g., wrong contact info, missing details) or processing challenges stemming from the very high volume of IDR cases.
The crux
While the No Surprises Act has successfully shielded employees from unexpected medical bills, the volume of ineligible disputes now clogging the system is driving claims costs.
Arbitrators often side with providers, leading to payments that far exceed in-network rates. As those costs cascade through plan spending, premiums and overall claim costs rise, affecting employer budgets and employee contributions alike.
AHIP and BCBSA said the current system lacks a workable appeal process, leaving plans no avenue to challenge decisions even when the underlying dispute should never have qualified.
The two groups are urging federal regulators to tighten oversight, clarify eligibility rules and impose stronger screening to prevent improper cases from moving forward.
They also called for “realigned incentives” so that independent dispute resolution entities are not rewarded for pushing unnecessary claims through arbitration.
Takeaway
For employers, the survey highlights how a well-intentioned law meant to protect patients has, in practice, created a potentially costly loophole.
Until regulators reform the system, arbitration under the No Surprises Act may continue to inflate claims costs and premiums, even for cases that never should have been disputed.
