How Employer Health Plans Could Evolve in 2026 and Key Decisions for Leaders

In 2025, many employers navigated complex decisions about their health plans.  Premium increases, benefit reductions, and network concerns with local health systems have contributed to a challenging environment for employers seeking to maintain competitive employee benefit plans.

Combined with varying levels of employee understanding about the employer’s investment in benefits, these factors can contribute to a challenging renewal environment. 

Employer needs and priorities can vary significantly based on workforce demographics, industry dynamics and benefit strategy.  As market conditions continue to evolve, many organizations are reassessing how to balance cost management with employee expectations.  

Some carrier partners observed increased movement in broker relationships, including among long-standing client-broker arrangements.  These trends appear to reflect the pressures employers face as they work to balance benefit affordability with the goal of maintaining meaningful coverage for their employers.  

Employers want to take care of their people, but they must do so in an affordable and sustainable way. Consistently high renewal increases are challenging employers’ ability  to continue covering employee costs and maintaining important benefits.

Many of the benefits recommendations we see today are designed to address prior year challenges. However, the factors driving last year’s claims costs may not be the same as the ones influencing this year’s, or next year’s experience.

Benefits solutions must be nimble, responsive, and focused on addressing root causes, rather than symptoms. And as consultants, it is our role to understand a population’s needs and tailor a program that aligns with priorities of today and for the future.

For 2026, absent any significant market changes these are among the strategies our consultants will discuss with clients in our efforts to help employers maintain competitive benefits programs.

Employers Accepting Risk via Alternative Funding

It’s typical to see an employer in the small and mid-market segment with a fully fixed cost group plan, known as fully-insured health insurance. This means that the cost is guaranteed to be fixed by the carrier for the year, with a reset every anniversary that may prompt renewal discussions and potential marketing to other carriers.

This model is proving to be challenging for many mid-market employers, as it can contribute to rising costs, limited visibility into cost drivers, and difficult decisions such as plan adjustments or increased employee contributions.

Our discussions with these groups typically start with questions like:

• Do you know if you are subsidizing other employers, or if you are the one being subsidized?
• How can you optimize your health benefit plan strategy?
• Do you know what contributes to rising costs of your health benefit plan each year?

Across nearly every aspect of their business, our clients have opportunities to improve outcomes. However, many employers find that their existing health plan offers less potential for meaningful improvement.

How Innovation Is Influencing Change

Variable cost health plans are common in the Fortune 500 market. And while mid-market employers may not have explored these types of plans in years past, recent innovations are making them increasingly accessible for groups with even fewer than 50 employees! 

Consider this: what does an employer do when confronted with an issue in their business? They likely perform some kind of root-cause analysis. But many employers have never done this exercise with their health plans. 

Alternative funding provides opportunities to first perform a root-cause analysis, and then to identify strategies to address those root causes. 

Some employers have already moved their benefit plans in this direction.  

The 2025 Employer Health Benefits Survey by KFF found that in 2025, 37% of covered employees at companies with between 10 and 199 employees are in a level-funded plan. When we combine employers with a self-funded plan, the data shows that 51% of employees in this market segment are now covered by a level-funded or self-funded plan. This is a significant development!

Being in a fixed cost health plan can feel like splitting a dinner bill evenly when others ordered all the appetizers— meaning you may pay more than your own claims experience warrants.

Pharmacy Drug Strategies 

Recently, the FTC settled with Express Scripts, one of the largest Pharmacy Benefit Managers (PBMs) in the country, who will adopt various measures to help reduce out of pocket costs to patients by an estimated $7 billion over the next 10 years.

PBM arrangements can sometimes create misaligned incentives, including the drug pricing structures, limited transparency, and rebate mechanisms, which can all put financial strain on employers and employees, especially employees who may need high-cost, specialty drugs.

While PBMs often emphasize their role in negotiating pricing and managing rebates from drug manufacturers, the underlying financial mechanisms can be difficult for employers to fully evaluate.  Transparency and oversight considerations have become important for employers, as specialty drug costs have become a significant cost driver.  According to the California Department of Insurance’s 2023 report, specialty drugs account for just 4% of all prescriptions, but account for 70% of total drug spending.

In choosing a PBM to work with, employers are making a very important decision for how they will manage a significant part of their overall health plan spending. In choosing a PBM, employers should ask:

• Can patient out of pocket costs be tied to net prices instead of list prices?
• How are generics or lower-cost alternatives presented when a higher-cost brand-name drug is prescribed?
• What transparency and reporting does the employer receive for their plan?
• What is the PBM’s business model and its sources of revenue?

A PBM is a key partner for an employer. Our consultants will be taking great care in vetting potential PBM partners in 2026, and employers should challenge their current providers to lead the charge when it comes to PBM reforms and best practices.

Care Navigation and Concierge Medicine

The binary structure of in vs out of network cost sharing may become less relevant in the coming years. While multi-tier programs that incentivize care at certain high quality health systems have always existed, it is possible that more employers will use technology-driven cost sharing plan designs.

Here’s how these structures typically work: Imagine an employee needs to see a doctor for an ACL reconstruction surgery.

With many typical plan designs, that employee would be limited to just seeing whether a surgeon is in their network, with network status sometimes viewed as a proxy for doctor quality. But this framework appears to lack the nuance required for such a sensitive and important decision.

Doctors and healthcare professionals perform at different levels. We can now better assess provider performance using outcome measures that provide a fuller picture of their performance. Effective outcome measurement tools do not simply say “Surgeon A is good; Surgeon B is bad.” Rather, these tools provide in-depth quality metrics related to patient outcomes such as recovery, readmittance rates, infection rates, and procedure-specific indicators.

Here's the insight: many employees typically don’t want to navigate all that data… they want to feel supported and have access to affordable care.

Most employees just want to make informed decisions about where they go and who they see for quality medical care. Today, employers can offer variable cost sharing structures to help steer employees toward higher quality providers. When supported by current data-driven insights, this approach helps ensure employees are receiving reliable advice.

For example, surgery at one provider may involve coinsurance after reaching the deductible, while another option may offer a predictable copay pre-deductible if the employee chooses a designated high-quality provider in the area.

Employers reap the benefits or pay the costs if employees receive bad or less than ideal medical care, both in direct and indirect costs.

Ultimately, our employer health plan recommendations for 2026 will more often include variable cost share plan designs intended to support access to higher quality care while helping employers manage overall spending.

In Closing

2026 is shaping up to be a significant year for employer health plans, potentially one of the most consequential since the passing of the Affordable Care Act.

As costs reach unsustainable levels, employers are seeking relief, and employees are increasingly challenged with the affordability of coverage.

This environment calls for decision-makers to do a deeper analysis than simply selecting the lowest-cost carrier each year.

Key themes this year include alternative plan designs and funding, and greater adoption of innovative benefits strategies.

If your plan was simply to renew as-is this year, this could be a good opportunity to reassess your approach to your health plan strategy.

Acrisure Can Help

Acrisure can help employers find the right employee benefit solutions, including employer health plan considerations. Explore our employee benefit services now.