Employers are grappling with rising health care costs while striving to offer competitive and inclusive benefits that support employee well-being. To address this issue, some employers are increasing their plan contributions as a temporary solution. However, as health care costs continue to rise, sustaining this approach will become increasingly difficult. Employers are now exploring alternative strategies to manage costs without burdening employees. As HR leaders plan for 2026, implementing long-term cost management strategies will be crucial in minimizing cost increases for employees.
Employers are considering employee value to address rising costs
Since employers are offering competitive, attractive, and inclusive benefits to support employee well-being, they must also prepare for faster health cost growth for years to come. Pursuing cost management strategies that can slow cost growth over the longer term and minimize cost increases for employees will be key for 2026 planning. For example, some companies are offering wellness programs that incentivize employees to adopt healthy behaviors, such as regular exercise and healthy eating. These programs not only promote employee well-being but also help reduce the risk of chronic conditions like cardiovascular disease and diabetes, which are major drivers of health care costs.
Employers attribute cost increases to specific health conditions
Musculoskeletal conditions, neoplasms, and circulatory disorders are the top three costliest chronic conditions per month. Implementation of disease management programs provides personalized support and resources to employees with chronic conditions, helping them better manage their health and prevent costly complications. By proactively addressing these conditions, employers can reduce the need for expensive treatments and hospitalizations, ultimately lowering health care costs. By optimizing spending under these conditions, employers can work to stabilize their overall increases in health care payments.
Ways employers can keep up with rising costs
64% of employers expect health care costs to increase by 7% or more this year. To manage these rising expenses, employers can implement cost saving strategies such as managing high-cost claimants and specialty drugs. Additionally, employers can utilize high-performance networks (HPNs) to keep health care costs under control. HPNs are networks that help employees find high-quality, affordable health care providers. The use of HPNs is becoming increasingly popular among employers because it can reduce employers’ total health care spending by 10-15 percent.
Employers are taking proactive steps to address rising health care costs and provide competitive and inclusive benefits. By implementing long-term cost management strategies, optimizing spending in key areas, and leveraging innovative solutions like HPNs, employers can navigate the challenges of rising costs while ensuring the well-being of their employees.
For more information about health care costs and benefits trends, view our 2025 trends flyer.
