Dive Brief:
- U.S. employers expect employees to shoulder more of their healthcare costs over the next two years to offset steep projected increases, according to WTW’s 2026 Best Practices in Healthcare Survey, released Oct. 28. Employers anticipate costs to rise 11.1% in 2027 before plan changes and 9.7% after, the global advisory firm said.
- Most employers (85%) are planning or considering shifting the cost to employees through premium contributions by 2028, compared to the 44% doing so today, the June-August survey of 471 employers with at least 100 employees found. A majority are considering shifting out-of-pocket expenses or lowering them for using high-value providers. Employers are also considering eliminating some generous coverage options (41%) and restricting eligibility (22%).
- The nearly 10% projected rise in costs after plan changes is the highest rate since the early 2000s and almost three times the pace of wage growth, WTW said. As employers face prolonged healthcare inflation, what was long considered mainly an HR benefits issue is now a finance issue, involving wage and workforce planning, experts have noted.
Dive Insight:
Many factors contribute to accelerating healthcare costs, recent studies have found. Among these reasons, pharmacy costs stand out: Employers expect them to increase 11.5% in 2026, up from 9% in 2025, WTW said. When factoring in drugs paid through medical benefits, WTW estimated that pharmacy accounts for about 36% of total healthcare claims.
“GLP-1s, specialty drugs and gene therapies can change patients’ lives, but the costs of these advances are hard to sustain,” Jeff Levin-Scherz, WTW’s Population Health Leader, North America, stated in a press release.
The survey found that GLP-1 coverage for weight loss dropped for the first time in three years, from 57% of employers to 53%. Of those who still cover GLP-1s, 30% are thinking about getting rid of the coverage; among those who have dropped it or are weighing dropping it, 91% cited cost as a reason, WTW said.
An uptick in the prevalence of chronic conditions, which has led to more high-cost claims, is also driving up expenses, according to an August report from professional services firm Aon. The adoption of technologies like artificial intelligence that support more detailed documentation and coding also plays a role, Aon noted.
Employers see hospital prices as another threat to affordability, citing the need for more transparency, pricing reforms, hospital rate regulation and greater fiduciary oversight, a May-June survey by the National Alliance of Healthcare Purchaser Coalitions found.
The WTW survey showed that while employers expect employees to share more of these costs, they’re cautious about changes that could be too disruptive, the firm said. Most prefer a measured approach, with 80% preferring long-term, multiyear solutions over immediate savings.
For their part, 58% of employees responding to a separate WTW survey said they would rather pay higher out-of-pocket costs than accept a plan with more restrictions.
At a recent conference for CFOs, senior VP of health and welfare benefits consulting with Marsh McLennan Agency advised business finance leaders that to help keep costs at bay and employees healthy, they need to start planning in January 2027 for their company’s 2028 health benefits, better manage high-cost claimants, such as those with chronic conditions, and not to fear change.
