What Trends Are Shaping Employee Benefits and Workforce Health?

An unprecedented combination of increasing healthcare costs, the growing ranks of younger adults with cancer and chronic health conditions, and shifting worker expectations are creating overlapping pressures on employee benefit plans, according to a 2026 Employee Health and Benefits Trends Report from consulting firm Marsh McLennan Agency.

“These trends underscore the need for thoughtful, proactive approaches to managing health benefits that protect both employees’ health and employers’ financial sustainability,” said Kate Moher, the president and leader of the firm’s employee health and benefits practice. “Overall, I see offerings moving away from one-size-fits-all models toward personalized, prevention-focused designs that identify and manage clinical and financial risk earlier.”

This article addresses key findings and trends from the report, and shares solutions and strategies you can implement to manage costs.

A ‘Convergence’ of Costs

Even with a preponderance of tools to identify emerging risks, the statistics are sobering.

Cancer diagnoses in people between the ages 20 and 29 have nearly doubled since 2018, according to the Marsh McLennan research, which also pointed to under-addressed health needs, including women and family care, oral health, mounting environmental risks, and the fact 1 in 3 adults will have a chronic condition before they turn 18.

Add to that list the growing cost of healthcare, including specialty treatments and glucagon-like peptide-1 (GLP-1) medications for weight loss, and the result is a “convergence of high-cost claimants,” Moher said.

It’s no wonder research from consulting firm Mercer found average per-employee costs for health insurance rose 6% in 2025 and are projected to increase another 6.7% in 2026 — making it the highest jump in 15 years.

At the same time, less tangible measures of employee well-being — including burnout, distraction and dissatisfaction — continue to rise despite the proliferation of support and resources, said Deb Smolensky, the vitality and well-being solutions global practice leader at workforce advisory firm NFP.

“Employees are operating under constant cognitive load,” she said, adding that uncertainty about the impact of artificial intelligence (AI) is exacerbating worker stress. “Financial pressure, rising healthcare costs and digital overwhelm are converging, directly impacting performance.”

Steps for Proactive Solutions

According to Moher, a proactive approach to these challenges is critical because “you can’t sustainably manage benefits if cost containment erodes access or quality.”

Therefore, the experts interviewed in this article offered the following solutions and strategies:

• Design benefits with prevention in mind. Plans should “shift spending upstream to prevent high-cost events before they happen,” Moher said. Strategies include screening and early detection programs, preventative dental services, increased women’s and family health support, and navigation and care coordination services. It’s important to reduce friction, Smolensky added, noting employees typically must work to find care instead of care being embedded into how work happens.
• Use health savings accounts (HSAs) as a tool for both physical and financial wellness. In the U.S., HSAs can help employees make better care decisions, said Moher, and as contribution limits are projected to increase in 2026, they are becoming “an increasingly useful component of total rewards.”
• Assess pharmacy plans. Examine pharmacy benefit manager contracts and consider strategies like biosimilar-first approaches that control costs without delaying treatment, Moher said. Access to high-cost therapies such as GLP-1s also could be linked with lifestyle and adherence programs, she added.
• Take a holistic approach to well-being. Smolensky noted employee stress and AI-fueled uncertainty is a “signal” that employers should add career growth, skill development and financial offerings. “Well-being is not a program gap; it is an operating model gap,” she said.
• Leverage data and analytics. Predictive analytics, agentic AI and proprietary tools can provide deeper insights into usage data, costs and guidance for patients, Moher said. For example, the Transparency in Coverage rule in the U.S. provides price and cost-sharing data that can inform plan decisions.
• Consider alternative models . Moher explained individual coverage health reimbursement arrangements (ICHRAs) allow U.S. employers to provide a tax-free allowance for employees to purchase Affordable Care Act (ACA)-compliant individual plans or HSAs. Considering rising plan costs, self-funding also may become a viable option for some employers, she said.
• Focus on flexibility and ownership . Alternative models could allow employers to address the differing needs of different employee cohorts, said Rob Whalen, the co-founder and CEO of BNFT, a benefits platform solutions company. While his company allows employees to convert paid time off (PTO) into financial rewards or other benefits, Whalen said this approach could evolve into self-directed benefits of all kinds. “When you build in more flexibility and self-direction and ownership, the sum is greater than the parts,” he said.
• Think beyond benefits. Bring together rewards, leadership, communication and technology to support the holistic well-being of your workers, Smolensky said. “Leading organizations are shifting from treating well-being as a benefit to treating it as infrastructure,” she said. “The opportunity is to redesign work with more clarity, recovery and focus so employees can engage sustainably.”

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Benefits
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