Benefit costs continue to be a top concern for employers. M3’s 2026 Momentum Report found that employers spend an average of $17,042 per employee each year on health care, with annual costs rising 7.46% on average.

Contributing to those increases are several high-cost areas, including cancer care, behavioral health, specialty medications, musculoskeletal conditions, and chronic disease management.

In response, employers are evaluating their benefits programs more strategically. The focus is shifting toward solutions that help manage costs, improve outcomes, and support long-term sustainability.

1. Data Is Driving More Strategic Benefits Decisions

Employers are increasingly using data and analytics to gain a clearer understanding of what’s driving benefit costs and where support is needed most. As organizations look for ways to manage rising expenses and improve outcomes, these insights can help identify emerging challenges earlier. They also support more informed decision-making and help ensure benefit investments are aligned with workforce needs.

2. Care Navigation Is Becoming More Important

Even the best benefits package only delivers value when employees know how to use it. Health care and benefits options are becoming increasingly complex. Many employers are exploring tools and resources that help employees better understand their coverage, connect with appropriate care, and make informed health care decisions. These efforts can reduce confusion, support better health care choices, and help employees get more value from the benefits available to them.

3. Alternative Health Plan Designs Are Gaining Attention

Strategies such as high-performance provider networks, direct contracting models, and variable copay plans are gaining momentum as employers look for ways to improve affordability, transparency, and access to quality care. As these options become more widely available, employers have greater flexibility to design benefit strategies that align with the needs of their workforce and organization.

4. Pharmacy Management Remains a Top Priority

Specialty medications, GLP-1 therapies, and emerging treatments continue to drive health plan costs. As a result, employers are placing greater focus on pharmacy oversight, PBM transparency, and long-term strategies to manage one of the fastest-growing areas of health care spending.

Key Takeaway

The most effective benefits strategies reflect an organization’s people, culture, and priorities. As employers look ahead to 2027, understanding workforce needs will be critical. Success will come from making thoughtful benefits decisions and balancing employee support with cost management.

For a closer look at the trends influencing employer benefits strategies, read the full M3 2026 Momentum Report to explore the insights behind these findings.

 

This information does not constitute legal advice.