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.
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, a sweeping tax and spending measure that includes implications for health savings accounts and employer-sponsored benefits.
While an early version of the bill passed by the House of Representatives promised broad reforms to group health insurance, most of those provisions were ultimately stripped from the final version. What remained were a handful of updates — centered on HSAs — that will affect how employers structure and manage high-deductible health plans (HDHPs) and related benefits moving forward.
The final bill significantly expands access and flexibility for HSAs. These updates take effect in 2025 and 2026 and mark the most substantial set of HSA reforms since the accounts were created.
Permanent telehealth compatibility with HDHPs
Effective for plan years beginning on or after Jan. 1, 2025, HDHPs can now offer first-dollar coverage of telehealth services without jeopardizing HSA eligibility.
This provision makes permanent a temporary COVID-era relief measure that was previously set to expire. Employers can now continue offering or reintroduce $0 telehealth visits under their HDHPs without disqualifying employees from contributing to HSAs.
Direct primary care arrangements now HSA-Compatible
Beginning Jan. 1, 2026, individuals enrolled in direct primary care arrangements, which are subscription-based models for routine and preventive care, will remain eligible to contribute to HSAs.
The law sets monthly caps on reimbursable DPC fees: $150 per individual and $300 per family. DPC payments within those limits are also now classified as qualified medical expenses, meaning they can be reimbursed from HSA funds.
Marketplace plans HSA-eligible
Starting in 2026, individuals enrolled in Bronze or Catastrophic-level Affordable Care Act marketplace plans will be allowed to open and contribute to HSAs. This is a significant departure from current rules, which generally require enrollment in HDHPs that meet strict federal design criteria.
The change may be particularly relevant for employers offering Individual Coverage HRAs (ICHRAs) or Qualified Small Employer HRAs (QSEHRAs), as it expands the range of employee-selected plans that maintain HSA eligibility.
What was left out of the final bill
Despite significant momentum in earlier versions of the bill, several proposed reforms to group health insurance and employer-sponsored benefits did not make it into the law.
ICHRA cafeteria plan limitations: Proposals to rebrand ICHRAs as “CHOICE Arrangements” and allow employees to use cafeteria plans to pay for exchange-based individual coverage with pre-tax dollars were removed. As a result, the regulatory status quo remains, and such premiums must still be paid with after-tax income.
HSA contributions for seniors: A proposed change allowing working individuals over age 65 to continue contributing to HSAs was not included.
Gym membership reimbursements via HSAs: Earlier drafts allowed HSA funds to be used for fitness costs — this too was scrapped.
Increased HSA contribution caps based on income: Proposals to allow higher earners to contribute more to HSAs based on income levels were eliminated from the final law.
Expanded catch-up contributions for married couples: The provision allowing joint catch-up HSA contributions to a single account for married couples filing jointly did not survive.
Rollovers from FSAs/HRAs to HSAs: A rule allowing limited rollovers from terminating flexible spending or health reimbursement arrangements into HSAs was dropped.
Implications for employer plans
While the final law has narrowed in focus, its HSA-related provisions will still impact how many employers approach plan design.
Strategic use of telehealth and DPC arrangements. Employers can now build HDHPs that include robust virtual and primary care access without affecting employee HSA eligibility. This flexibility may allow for more cost-efficient, employee-friendly benefit structures.
Expanded HSA access for ICHRA offerings. For employers offering ICHRAs or QSEHRAs, the inclusion of Bronze and Catastrophic marketplace plans as HSA-eligible opens a wider range of plan options for employees, potentially improving satisfaction and adoption.
Administrative action required. Employers choosing to take advantage of these new flexibilities must work with legal counsel, third-party administrators or their broker to ensure plan documents, enrollment materials and employee communications are updated ahead of the 2026 changes.
Bottom line
The One Big Beautiful Bill ultimately delivered modest but meaningful changes for employers offering HDHPs and HSAs. While many had hoped for a broader overhaul of group health insurance and reimbursement arrangements, the final law doubled down on expanding the use and appeal of HSAs — giving employers more tools to offer flexible, consumer-driven health benefits in an evolving landscape.
If you have questions about how this may affect your current health plan and how it expands your options, please give us a call.
The typical family’s income slips by more than $12,000 in the year after a breadwinner suffers a critical illness such as a heart attack, stroke or cancer, according to a study by Metropolitan Life Insurance Company.
This reduction of income isn’t primarily due to lack of medical coverage. It is actually attributed to the inability to work and earn an income. The approximate out-of-pocket medical expenses add about $3,000 dollars of extra costs during the first post-diagnosis year.
Despite these side effects, MetLife found that almost half of Americans with full-time jobs did not even have $5,000 dollars’ worth of accessible savings to cover a major illness diagnosis. More than 28% did not have at least $500 dollars in savings.
The MetLife study also showed that:
In the event of a medical emergency, two-thirds of American workers had three months or less in available savings.
Only one-fifth of women and one-third of men were “very confident” that a financial emergency could be handled with their rainy-day fund.
A little more than half of those with a full-time job were extremely or somewhat concerned about the possibility of a critical illness impacting the financial stability of their family.
The study concluded that many Americans are unprepared to deal with the short- and long-term loss of income and out-of-pocket expense that is all too often associated with critical illness. Another aspect of the study may reveal the reason so many are unprepared: every surveyed patient had medical insurance, but only 7% had critical illness insurance and only 4% had cancer coverage.
Critical illness insurance
The purpose of critical illness insurance is to provide a one-time or lump-sum payment to assist in offsetting the out-of-pocket expenses associated with certain critical illnesses.
Applicable critical illnesses may include an organ transplant, heart attack, stroke, cancer, loss of vision, burns, HIV, or kidney failure. The critical illness insurance is not a replacement for standard health insurance or disability insurance. The design is purely to supplement such policies.
Only 28% of the surveyed full-time workers had heard of insurance for critical illness. However, from further questioning about critical illness insurance, the number might be even lower, as three out of every five patients seemed to confuse it with their standard health insurance policy – and one in five confused it with disability insurance or other government programs.
While the study showed a clear theme that many Americans are monetarily unprepared for a critical illness, it also provided evidence that many workers are concerned about their lack of preparation.
By expanding employee benefits to include voluntary critical illness insurance or raising awareness about existing benefits, you are offering important financial protection to employees.
In other words, you can help bridge the gap between the cost of a critical illness and what standard insurance covers, which allows the employee to better focus on recovering and possibly returning to the workforce.
If you want to know more about voluntary critical illness coverage, give us a call.
A growing number of employers are adding menopause-related benefits to their health and wellness programs, recognizing both the personal and business impact of this phase of women’s health.
According to a 2023 Mayo Clinic report, menopause-related symptoms are responsible for an estimated $1.8 billion in lost workdays annually in the U.S., largely due to absenteeism and diminished productivity.
As a result, employers such as Microsoft, IBM and several large financial institutions have already launched menopause initiatives. A 2024 Mercer report found that 15% of U.S. employers now offer menopause-specific benefits, compared to virtually none just a few years ago.
The rise of menopause benefits
Menopause is defined as the point when a woman has gone 12 months without a menstrual period, typically around age 52.
But the transition often begins much earlier. Perimenopause, the lead-up phase, can last several years and bring with it a wave of challenging symptoms: hot flashes, brain fog, insomnia, mood swings and more — that interfere with daily life and work performance.
Forward-thinking companies are starting to introduce menopause-specific benefits, including:
Flexible work arrangements.This includes remote options, reduced hours or flexible schedules to help manage symptoms.
Access to virtual care. These services provide access to menopause-trained providers, including reproductive endocrinologists.
Mental health support.This can be offered through your employee assistance program and mental health platforms.
Hormone replacement therapy coverage. Financial benefits like flexible spending accounts and health savings accounts allow employees to use tax-advantaged funds for services such as HRT, which is typically not covered by group health plans. Self-insured employers can choose to include coverage in their plans.
Environmental accommodations. This can include providing portable fans, relaxed dress codes, wellness rooms and more.
Educational resources. Provide access to digital content on menopause health and treatment options, including webinars, videos, podcasts, journals and articles.
Support groups. These can be online or in person and help combat isolation and stigma.
The business case
Women between ages 45 and 64 represent about 17.5% of the U.S. workforce, according to the Department of Labor. Yet a Biote survey found 17% of women ages 50 to 64 have quit or considered quitting due to menopause symptoms.
Supporting this group brings several business benefits:
Retention of top talent: Many women face menopause symptoms just as they reach peak leadership potential.
Improved productivity: Mitigating symptoms can reduce time off and help employees stay focused.
Legal risk reduction: Inclusive policies may help companies comply with workplace protections under laws like the Pregnant Workers Fairness Act.
Enhanced employer brand: Women with access to menopause benefits are more likely to recommend their employer, according to a joint 2023 study by Bank of America and the National Menopause Foundation.
Communication is key
Even the best benefits can fall flat if employees don’t know they exist. Best practices include:
Hosting informational sessions about menopause support programs.
Training managers on how to speak sensitively about menopause in the workplace.
Highlighting these benefits in open enrollment materials and onboarding packets.
Ensuring that digital portals and HR systems clearly identify menopause-related resources.
The takeaway
As menopause-related benefits gain traction, employers should assess whether their current health and wellness offerings meet the evolving needs of midlife employees. Proactively addressing this gap can support compliance, improve retention and strengthen workforce stability.
In a major announcement, America’s Health Insurance Plans (AHIP) said that more than 50 major insurers — including UnitedHealthcare, Aetna, Cigna and various regional Blue Cross Blue Shield plans — have pledged to significantly streamline the prior authorization process and improve the patient care experience.
This shift could bring relief to more than 250 million Americans enrolled in commercial, Medicare Advantage and Medicaid managed care plans.
What’s changing?
The insurers committed to a six-part plan to reduce the administrative burden of prior authorization, modernize approval processes and improve the speed of care. Key changes include:
Standardized electronic prior authorization submissions, targeted for 2027.
Reduced prior authorization requirements for certain services, effective in 2026.
Continuity of care protections for patients switching plans mid-treatment, ensuring prior approvals are honored for 90 days.
Clearer communication about authorization decisions and appeals, set for implementation in 2026.
Real-time approvals for at least 80% of electronic requests by 2027.
Mandatory medical review of any denial based on clinical grounds, which is already in effect.
Evolution of prior authorization
Prior authorization was originally intended as a cost-control measure to ensure treatments are medically necessary and cost-effective. But for many patients and businesses, it has become a bureaucratic nightmare.
According to the American Medical Association’s (AMA) 2024 survey of practicing physicians:
93% reported that prior authorization delays access to necessary care.
82% said it sometimes causes patients to abandon treatment altogether.
88% believe it increases overall health care costs through ER visits, extra office appointments and hospitalizations.
Nearly one in three reported that the process led to a serious adverse event, including hospitalization or even permanent harm.
While these delays have real consequences for health plan enrollees, for businesses that provide group health insurance, they can translate into reduced employee productivity, higher out-of-pocket costs for workers and lower satisfaction with benefit plans.
In recent years, there’s been a growing backlash against prior authorization and the toll it takes on time-sensitive care. Until now, insurers have been slow to change. But as dissatisfaction has grown, insurers like UnitedHealthcare and Aetna have started to make moves — such as eliminating requirements for certain medications or bundling approvals for cancer-related imaging tests.
AHIP’s new industrywide pledge is the most sweeping effort yet and signals that insurers recognize the pressure to act.
Will it work?
While the commitment marks a major policy shift, questions remain about how fast and how fully these changes will be implemented. As the AMA notes, similar voluntary pledges in the past haven’t produced substantial results. In fact, only 10% of physicians surveyed said they currently work with insurers offering programs that exempt “trusted” providers from repeated approvals.
Still, the promise to move toward real-time decisions and reduced authorization burdens — especially for high-performing doctors and common procedures — could ease friction and improve patient experience.
The takeaway for employers and health plan buyers
If AHIP’s reforms are implemented as promised, the impact on enrollees could be significant:
Faster care: Less waiting for approvals could reduce time off work and lower stress.
Lower costs: Fewer delays can prevent complications that lead to higher downstream medical bills.
Simplified processes: Standardization and real-time digital systems will cut down on paperwork and confusion.
Health insurance is back on the legislative agenda in Washington, with several proposals that could reshape how employers provide coverage to their workers.
Three bills gaining traction in the House aim to overhaul parts of the Affordable Care Act (ACA), expand access to group health plans for small employers and protect the use of stop-loss insurance for self-insured plans.
Here’s a summary of what’s on the table and how it could affect employers.
Health Care Fairness for All Act
Key change: Repeals the ACA employer mandate
Introduced by Rep. Pete Sessions (R-Texas), this bill would eliminate the ACA’s employer health coverage mandate, the requirement that companies with 50 or more full-time employees offer affordable coverage or face penalties.
While the bill removes this mandate, it maintains several popular ACA provisions, including protections for preexisting conditions and guaranteed issue requirements.
To prevent people from enrolling in coverage only after becoming ill, the bill would impose a 20% late-enrollment penalty on individuals who join a plan without maintaining prior coverage for at least 12 months.
Another significant provision is the introduction of “Roth HSAs,” which would replace traditional health savings accounts. Unlike HSAs now, contributions would be made with after-tax dollars, but unlike current HSAs, they could be paired with low-deductible plans and not only high-deductible health plans.
Association Health Plans Act
Key change: Allows small businesses to band together for group health insurance
Backed by Rep. Tim Walberg (R-Mich.) in the House and Sens. Roger Wicker (R-Miss.) and Rand Paul (R-Ky.) in the Senate, the AHPA would revive and expand rules allowing small employers and self-employed individuals to purchase health insurance as a single group.
By pooling together, these employers could access large-group health plans that often offer better rates and more plan options than small-group or individual plans. Supporters argue this would increase access to affordable coverage for millions of workers who currently lack employer-sponsored insurance.
Self-Insurance Protection Act
Key change: Shields stop-loss insurance from state and federal regulation
This bill, introduced by Rep. Robert Onder (R-Mo.), aims to preserve small employers’ ability to self-insure their group health plans by protecting stop-loss insurance arrangements from being classified or regulated as traditional health insurance. Some states have attempted such reclassification to restrict their use among small employers.
Stop-loss insurance reimburses self-insured employers for catastrophic claims beyond a certain threshold. These arrangements make self-funding viable even for smaller businesses with less predictable health care costs.
Proponents say the bill levels the playing field for small employers that want to use self-insurance to control costs. Detractors argue that such plans, when not subject to the same rules as fully insured policies, may not offer sufficient consumer protections or minimum benefits.
The takeaway for employers
Currently, all three bills are awaiting a hearing in the House Education and Workforce Committee, and as of this writing, there have been no votes on the measures.
If these bills gain momentum, employers — especially smaller ones — could see more flexibility and options when it comes to providing health benefits.
While these bills still face political hurdles, they signal where health policy may be headed and what strategies employers may want to prepare for in the years ahead.
