Five resolutions to guide benefit strategy in 2026 and beyond 

The new year has just begun, and it’s already time to start planning for 2026. To kick things off, we’re offering a list of what we’ll call strategic planning “resolutions” – some guidelines for addressing the health program challenges of the coming years. In the weeks that follow, Mercer colleagues will share their expertise to provide more specific direction on where and how you might put these resolutions to work. 

Before we jump into the list, let’s spend a few minutes on cost. Health benefit cost per employee rose 4.5% in 2024 and is predicted to rise 5.8% in 2025. These are among the highest annual increases we have seen in a decade, which makes it all the more concerning that over half of the CFOs we surveyed last year said that for costs to be sustainable, annual increases need to be held to the level of CPI or below. Only one in five said that increases two points above CPI would be acceptable – and yet that’s where we are.  

This data underscores the importance of communicating regularly with your CFO to manage expectations about benefit cost and being ready to explain factors driving the underlying medical trend. Higher reimbursements to hospitals and other providers is a key reason, as is the growing spend on pharmacy, especially for specialty drugs. Add to that provider consolidation, provider shortages, and the misaligned incentives inherent in fee-for-service payment models. Some cost growth is due to progress – the continued focus on research and innovation that brings us life-changing drug therapies, technology and treatment options. All this against the backdrop of an aging workforce combine to make health care costs challenging to manage. 

In this environment, quick fixes won’t accomplish much – a thoughtful multi-year strategy is likely the best path to optimal value for employees and the business. As you embark on planning for 2026 and beyond, consider making these five resolutions:  

1. Embrace “good disruption” – new medical plans and network strategies. High-performance networks, alternative health plans and other network optimization offerings are gaining traction. About a third of employers now offer one of these non-traditional medical plans, and another 29% are considering it. The growth is partly attributable to national and regional insurers expanding their high-performance medical plan options. Variable copay plans, such as Surest and Coupe/SimplePay, have only been around for a few years but have already achieved significant penetration in the commercial market and are anticipated to continue to grow. Exclusive Provider Organizations, which typically offer employees lower contributions and cost-sharing in exchange for staying within a small, carefully curated provider network, have also seen a sizeable increase.   
2. Emphasize benefits that drive health and resiliency. Good health is good business. Are your programs maintaining, or improving, the health of your population (which translates to productivity)? Chronic condition management is always a good place to start and there have been exciting advances in this area. As we await solid research, we were encouraged to hear one employer recently share that medical costs are trending down for employees and family members who have been taking GLP-1s for weight-loss. Think in terms of the health and resiliency of all generations in your population of workers. Family forming benefits have expanded in recent years to address the reproductive health of both men and women. The realities of workforce demographics are leading employers to support worker longevity; for example, cancer screenings and other specialized cancer resources are becoming increasingly common. Support for mental health and substance use disorders is needed by all generations and especially valued by Gen Z. Keep in mind that you may not need to add new programs or solutions – repackaging existing programs and finding better, more targeted ways to communicate them may advance your goals for improved employee experience and outcomes. 
3. Take action on health equity. When people put off getting needed medical care, it’s typically because of financial concerns and/or difficulty accessing care. Employers need to address both of these issues if they are to achieve the goal of building health and resiliency as discussed above. Our surveys show that most employers have made a start by studying gaps in care, which are often associated with social determinants of health such as race, ethnicity, and socioeconomic status. Need ideas? Send a mammogram van to a manufacturing location where a significant number of workers are Black females, who are at a higher risk for breast cancer, and pay for a second follow-up mammogram when needed. Promote HIV testing and support for workers in the cities where the test-positive rates are the highest in the US. Arrange for expanded telemedicine and/or a direct primary care arrangement for employees in a rural location with limited options for care. It’s time to move from analyzing the problem to taking action. 
4. Help realize the promise of AI. AI has been around and evolving for a while, but the introduction of GenAI has brought new, higher – even overwhelming – expectations. If you’re wondering how, and where, this technology can be used to improve your health program performance, you’re not alone. When evaluating an application such as an AI agent to handle benefit questions, start with “why AI” – what unique value is it adding? Programs that not only help members understand how to accomplish a task but can pull up necessary forms and help submit them are providing a next-level service. But there’s a second test – you must also be confident the program will do no harm. As AI becomes embedded in all parts of the healthcare ecosystem – benefit administration services, medical carriers, point solutions, and health care providers – it’s important to hold your vendor partners to this same standard. They must demonstrate that AI is enhancing not only their own business effectiveness but also delivering more to you as a business customer and better service to your employees as plan members/patients. Done right, AI has the potential to drive higher quality care, improved patient satisfaction, and cost efficiencies. Health plan sponsors have an important role to play in ensuring that the integration of AI actually does lead to more efficient use of resources, more equitable access to care and better outcomes.  
5.  Multi-year strategies must be grounded in data – all of it. The challenges of today’s environment demand more than quick fixes or copycat solutions. But when investing in longer-term strategies, it’s especially important to get it right – and that means understanding the problems you need to solve for. Start with measurement and reporting from your medical and pharmacy vendors – detailed demographic information and individual program performance metrics (e.g., participation, engagement, provider/access points, risk scores, etc.) Also look at disability data. Look at time off. Look at the 401(k) plan data – are more people taking hardship withdrawals? Data from all these sources combined with detailed demographic information will tell the story of factors impacting the overall health of your employees. With this, you can be confident that you are pursing the best opportunities to support your workers’ health, happiness and productivity. Then keep going back to your vendor partners and the data to look for concrete evidence that your programs are making a real difference in people’s lives. 

It's a new year with new challenges and new opportunities for strategic planning. We look forward to delving deeper into these five resolutions in the coming weeks.