Dive Brief:
- Employers may rein in healthcare benefits they offer workers next year in order to pull back a projected rise in their plan-related costs to 9.7% year-over-year from an otherwise expected 11.1% increase, according to a preview of the findings of WTW’s 2026 Best Practices In Healthcare Survey reviewed by CFO Dive.
- The respondents signaled reluctance about the changes. Nearly half (49%) of employers surveyed said they see “significant” changes in their healthcare programs in the next three years, up from 34% last year, but a little over half (56%) said they are unwilling to take “disruptive” actions to realize the needed savings.
- Companies are considering taking a number of steps to cut their costs through healthcare plan redesigns, including shifting some of the expense to employees through having workers cover more out-of-pocket expenses and having them make “premium” contributions along with restricting eligibility.
Dive Insight:
The WTW findings come as a separate report from insurer Aon released Thursday stated that employer costs for employee healthcare have doubled since 2022. Companies’ average plan costs increased 8.8% to total $14,432 in 2026 compared to the year earlier period, alongside a 6.4% increase to $3,130 in premiums coming out of employee paychecks, according to data from Aon based on historical information and projections of 1,100 U.S. employers representing 7.9 million employees.
"Employers have now experienced several consecutive years of health care cost increases that are approaching double digits," Mike Pasterick, North America Health Solutions Leader for Aon, said in a statement in the release. "At this level, rising health care costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities. Leaders are undergoing pressure to maintain affordable benefits while continuing to invest in attracting, supporting and retaining talent."
The drivers of the increased medical spending include more prevalent chronic conditions, and higher prescription drug spending such as on GLP-1 therapies for weight loss, according to the report. In addition, the report tied increased use of technologies such as AI to higher costs, asserting that it leads to more detailed documentation and coding that can come with higher billed charges.
CFOs considering cutting back on plans must weigh the risks that shrinking benefits might have on workforce retention and corporate image and branding. Starbucks reportedly ended its GLP-1 coverage, Business Insider reported in August. The move sparked a call from the Obesity Action Coalition for the coffee giant to reverse its decision.
"An employee should not lose access to a treatment simply because the diagnosis is obesity," said Joe Nadglowski, OAC President and CEO in a statement in a Thursday release. "Starbucks has built its reputation in part on offering strong employee benefits. We are asking the company to apply that same commitment to employees living with obesity and reverse this decision."
Starbucks did not immediately respond to a request for comment.
The WTW report is based on a survey of 471 respondents representing 7 million employees at companies ranging in size from 100 employees to more than 25,000. It was conducted between Jun 22 and Aug. 7. The full survey results will be released in September, according to a spokesperson.
