Blog

• Key Insight: Learn how controlling health costs overtook retention as employers’ top benefits priority.
• What’s at Stake: Rising care avoidance risks higher absenteeism, worsening outcomes and escalating employer costs.
• Forward Look: Expect a strategic shift toward targeted non‑medical benefits to curb costs and improve outcomes.
• Source: Bullets generated by AI with editorial review

Employers say controlling health costs is their No. 1 benefits objective in the new year, surpassing attracting and retaining employees and improving productivity for the first time since 2022, according to a new research by MetLife.

The company’s 2026 Employee Benefit Trends Study also revealed that 83% of employees say rising living expenses and medical costs are their top stressors. On average, employees miss 6.1 days of work due to health-related issues, and 50% avoided medical care for cost reasons.

“What we’re seeing in this year’s Employee Benefit Trends Study is the cumulative effect of economic pressure on the workforce,” said Todd Katz, head of Metlife’s U.S. Group Benefits. “Those financial strains increasingly show up in their day-to-day well-being. That level of stress erodes well-being — only 44% of employees describe themselves as holistically healthy today — and has real consequences for attendance and focus at work.”

Seventy-three percent of employers say non-medical benefits are the most cost-effective for boosting employee health, and 83% say they reduce medical costs. Employees who use five or more of them are 38% more holistically healthy, according to the study.

Katz talked about these new findings and more in a recent interview with Employee Benefit News. This interview has been edited for length and clarity.

Why are half of employees avoiding medical care due to out-of-pocket costs — and what are the downstream risks?

With healthcare costs increasing, many workers either can’t afford necessary care or are prioritizing other urgent financial needs to maintain stability. This is one of the most concerning findings in this year’s study. When people skip routine or preventive health care, issues that could have been addressed early often become more severe, and more expensive, over time.

This creates a cascade of risks: Worsening health outcomes, more frequent or prolonged absences and ultimately higher medical costs for both employees and employers. It’s one of the clearest signals that the traditional model of relying solely on medical coverage isn’t enough. Employees need access points through non-medical benefits and preventive services that help them stay ahead of health issues rather than react to them.

How does economic uncertainty compound stress, burnout and health-related absences?

Economic uncertainty magnifies everything. Seventy-seven percent of employees tell us they’re worried about broader economic conditions, and when you combine that with rising expenses, you can see a level of chronic stress that affects every dimension of health — physical, mental, financial and social.

Workers experiencing that strain are more susceptible to burnout, less able to stay on top of preventive care and more likely to experience interruptions in their health routines. This often begets absenteeism and disengagement, which employers feel acutely. These pressures don’t exist in isolation — they stack, and when they do, they compromise both employee well-being and organizational performance.

Why have engagement, productivity and loyalty remained largely flat despite higher benefits spending?

What stands out in this year’s study is the disconnect: 62% of employers increased their investment in benefits, and 60% expanded their voluntary offerings, yet key indicators like engagement, loyalty and productivity have essentially plateaued for three years running.

This tells us that more benefits don’t automatically translate into better outcomes. The real differentiator is whether those benefits are strategic, targeted and aligned with the workforce’s actual needs. Holistic health improves when employees select the right benefits and have a great experience using them as they were intended. When employees are navigating economic stress and avoiding care, adding more options without improving accessibility or relevance won’t move the needle. Employers need smarter, not just larger, investments.

Which non‑medical benefits are delivering the greatest gains in holistic health and medical cost reduction?

Several categories stand out, including accident, hospital indemnity and critical illness coverage, which help employees manage unexpected health events and costs. Another one is dental benefits, which play a central role in preventive care.

How can HR leaders increase utilization of non‑medical benefits?

Employers can drive higher engagement by:

• Tailoring offerings to the needs of different employee populations rather than taking a “more is better” approach.

• Simplifying access and communication so employees clearly understand what’s available and how it fits into their daily lives.

• Emphasizing preventive care, which 62% of employees say depends on access to non‑medical benefits.

• Integrating benefits so they reinforce one another — financial wellness supporting mental health, disability benefits complementing medical care, for example.

When employees understand how their benefits can help them to navigate real-world challenges, not just medical events, and in holistic ways, they engage at much higher levels and outcomes improve accordingly.

A band of House Republicans bucked party leaders to join Democrats in passing a measure to restore expired Obamacare subsidies through the end of President Donald Trump’s term, as rising healthcare costs drive midterm election anxieties.

The House voted 230-196 Thursday to send a three-year extension of the expired tax credits to the Senate. Seventeen Republicans supported the measure.

The measure is unlikely to overcome Republican opposition in the Senate, but several of the Republican defectors said they hoped a strong showing in the House would increase pressure on the Senate to reach a bipartisan compromise.

The House Republicans who crossed party lines included some of the party’s most politically vulnerable lawmakers, a glaring signal of members’ concerns over the surge in out-of-pocket premium costs for more than 20 million people who buy their own insurance.

Democrats, seeking to take back the House in November’s midterm elections, have hammered Republicans over rising healthcare costs as part of broader criticism that Trump has failed to deliver on campaign promises to bring down the cost of living.

House Republican leaders have fought an extension of the pandemic-era subsidies. The vote itself was forced only after four GOP moderates broke ranks to join a rare maneuver to bypass the party leaders’ control of the House agenda to bring the renewal to a vote.

The issue is particularly risky politically for incumbent Republicans, because Obamacare enrollment tends to be higher in Republican-controlled states that declined to expand Medicaid under former President Barack Obama’s landmark healthcare law. Out-of-pocket Obamacare premiums more than doubled on average with the expiration of the subsidies, according to the nonpartisan health research organization KFF.

Trump, mindful of Democrats’ attacks over healthcare, has urged congressional Republicans to take action on the issue, but favors sending subsidies to people through tax-advantaged health savings accounts, rather than reviving the tax credits, allocated to insurance companies.

A group of senators lead by Maine Republican Susan Collins is working to strike a deal that would revive the subsidies with modifications. Bernie Moreno, an Ohio Republican involved in those talks, said the group is close to reaching a deal. The House-passed measure could serve as a legislative vehicle for a Senate compromise, if lawmakers can reach one that satisfies enough other senators.

The group must balance Democrats’ desire to leave the tax credits largely unchanged, and Republicans’ demands to impose income caps, eliminate cost-free premiums, and bolster abortion restrictions and fraud protections.

“If it’s a bipartisan solution, everybody will have something they want, and they’ll have something they won’t want,” said Senator Raphael Warnock, a Georgia Democrat involved in talks. “Let’s see where it lands.”

• What’s at Stake: Rising healthcare costs threaten employer affordability, coverage options, and competitiveness.
• Supporting Data: Healthcare spending projected to rise 6% annually 2023–2033.
• Forward Look: Plan for preventive investments; Deloitte models suggest up to $2.2 trillion annual savings by 2040.
• Source: Bullets generated by AI with editorial review

As healthcare costs continue to climb, leaders face mounting pressure to balance affordability with quality care, and strategic action can keep both within reach.

Currently, healthcare costs are projected to rise about 6% annually from 2023 to 2033, according to the Centers for Medicare and Medicaid Services. As a result, healthcare will consume a larger share of the U.S. economy, which will in-turn drive up expenses for employers and potentially limit coverage options for employees. However, new findings from professional services firm Deloitte reveal ways in which organizations can manage those new costs through a few key changes to their healthcare strategies.

“If we can move the industry from what is now, which is a reactive medical system, to a truly proactive and preventative healthcare system, not only can we help improve the lives of people and increase health spans, but we can also save a significant amount of money,” says Dr. Kenneth Abrams, chief medical officer at Deloitte.

According to Deloitte’s data, investments in disease prevention, early detection and other proactive measures could save the U.S. healthcare system up to $2.2 trillion a year by 2040. Organizations can see the same cost savings by supporting early detection and proactive care, which can help reduce long-term medical costs, minimize absenteeism and improve overall employee well-being and productivity.

The role of preventative and primary care

Prioritizing the care and management of chronic conditions such as diabetes, vascular disease, metabolic disorders and musculoskeletal issues is one of the most impactful improvements leaders can make to their existing healthcare strategies, according to Abrams. When identified early enough, many chronic conditions can be avoided — or even reversed — through preventive treatments and lifestyle changes. The first step is for leaders to assess what is and isn’t covered under their current plans and seek out alternatives, like medical screenings, immunizations and routine check-ups. The result is a healthier, happier workforce and fewer costly insurance claims over time.

In addition, leaders should provide targeted educational resources and raise awareness about chronic condition management, while also promoting any updates they make to benefits and coverage. Managing a chronic condition can add layers of complexity to navigating the healthcare system, which often prevents employees from accessing or utilizing the care they need.

“People who are managing a chronic illness and looking to be healthy need different types of information at different points in time than their colleagues,” Abrams says. “Providing the right kind of interventions can be extremely valuable [and effective.]”

Proper primary care can play an active role in guaranteeing the success of those efforts. Regular blood pressure checks, blood work and vaccinations are just as important to improving and sustaining better health outcomes, according to Abrams, which is why he suggests that leaders consider switching to a plan that either requires or encourages having a primary care provider. The impact of these changes doesn’t stop at improved health outcomes — it shows up directly in the workplace.

“We know that individuals who take care of themselves have greater presenteeism and reduced absenteeism when they’re healthier,” Abrams says. “We also know that they tend to be more productive in their work when they’re physically and mentally well off.”

With the current landscape showing no signs of slowing or stopping anytime soon, leaders need to be thinking of ways to remain competitive amidst the changes to the healthcare system in any way that they can, and making intentional changes to their health and wellness strategies can help them do that.

“There’s a significant increase in healthcare costs that is taking place and getting ahead of that is vital,” Abrams says. “Companies that actually invest in promoting the health of their people are ensuring they become [and remain] employers of choice.”

• • Key Insight: Discover how prioritizing specialty, behavioral health, and data can curb rising employer costs.
  • Supporting Data: Employers project a 9% rise in healthcare spending for 2026 (Business Group on Health).
  • Forward Look: Prepare for intensified focus on specialty access, behavioral supports, and benefit analytics.
  • Source: Bullets generated by AI with editorial review

  As employers struggle to find ways to mitigate year-over-year healthcare cost hikes, staying knowledgeable about upcoming trends will be the key to meeting employees’ needs, while keeping spending low.

  According to a recent survey from the Business Group on Health, employers should anticipate a 9% increase in healthcare spending for 2026. While many of the drivers that have led to rising costs are out of benefit leaders’ control, there are many ways in which they can mitigate some of the effects by focusing on the most glaring healthcare challenges and facing them head-on with a proactive approach.

  Employers will need to focus on three key areas in 2026: Specialty care, behavioral health, and access to reliable data. In fact, nearly three in 10 people are delaying or skipping care due to cost or insurance barriers, according to data from the International Foundation of Employee Benefit Plans. Meanwhile, chronic conditions — specifically mental and behavioral health challenges — are already affecting a large portion of the workforce with little investment in adequate support strategies, according to the Harvard Chan School of Public Health, resulting in billions of dollars lost for organizations everywhere.

  Even when benefits exist, a significant share of workers say they don’t fully understand how their benefits work or how to maximize them, according to findings from the Plan Sponsor Council of America, stunting the impact of existing programs and hindering efforts to implement new ones.

  If benefit leaders want to put their best foot forward and set themselves up for success in the new year, these are three areas where they can start:

  The growing role of addiction and recovery support

  Untreated mental and behavioral health issues like mental health and substance use disorders result in substantial costs for businesses, according to the Center for Prevention and Health Service, with an approximate loss of around $60,000 annually in absenteeism for one organization and $105 billion nationwide. This makes investing in the right supportive efforts and partnering with the right organizations a key benefit strategy going forward.

  “Benefit leaders are facing some really difficult choices,” says Cooper Zelnick, CEO of addiction recovery service Groups Recover Together. “How do they build more robust wellness benefits that are competitive and that meet the needs of their employees, without sacrificing their own financial stability or passing those costs on to their employees?”

  Improving access to specialty care is becoming critical

  More than 100 million specialty referrals are issued each year, according to the Institute for Healthcare Improvement and the National Patient Safety Foundation. Yet, in a survey by AMN Healthcare, new patients in 15 metropolitan areas waited an average of 42 days for OB-GYN and 40 days for gastroenterology appointments. Those seeking dermatology and cardiology appointments had slightly shorter wait times of four to five weeks. Altogether, the difficulty of scheduling follow-up appointments has become a major barrier to care — one that benefit leaders should take seriously.

  If care for conditions and underlying causes remain out of reach, more employees will start to rely on emergency rooms and urgent care for treatment because it’s quicker, driving up healthcare costs and exacerbating the probability of absenteeism and disengagement from employees.

  “It’s not about the number of benefits you offer, it’s about the quality and providing the benefits that people will actually use,” says Bryson Tombridge, CEO of medical dermatology care platform Tono Health. “The relationship between patients and specialized care is critical. It’s giving them a moment of relief and building a sense of trust that they’ll have access to the best solution for whatever problem they’re facing.”

  How access to better data can redefine benefits

  Only 12% of employees reported feeling truly satisfied with their benefit packages, according to a recent survey from employee benefits and financial services firm Drewberry. Data-driven benefit tools could be the solution to not only appease workforces, but it can also help organizations keep their workforce engaged in benefit selection and innovation, especially when it comes to employee health and wellness.

  “If you can be on the preventive side of things and get employees what they need when they need it, you’re less likely to reach the point where costs begin to increase,” says Amanda Martell, the director of human resources at wellness benefit solution LifeSpeak.

• Key insight: Learn how benefits and workflow tools transform retention into strategic workforce resilience.
• Expert quote: Giraldo: Supporting clinicians with mental health, flexibility and advancement fosters better patient care.
• Supporting data: HRSA projects major healthcare staffing shortages for 12 years, especially rural and critical-care.
• Source: Bullets generated by AI with editorial review

Benefits that provide stability and growth help healthcare professionals care for themselves and their patients, making them essential combatants of burnout and turnover.

According to Health Resources and Services Administration’s (HRSA) 2024 data, major staffing shortages are expected across the healthcare industry for the next 12 years, with rural and critical-care facilities taking especially hard hits. To recruit and maintain these crucial frontline workers, healthcare employers must put employees’ needs first.  

Offerings like flexibility, along with professional development opportunities and tools that streamline workflow, go beyond acknowledgement of people’s day-to-day work — they show an employer’s investment in its workforce’s well-being, says Hanna Giraldo, senior director of talent at MedPro Healthcare Staffing.

“When clinicians feel supported, they’re able to give the best of themselves to their patients,” she says. “That begins with prioritizing mental health, offering flexible scheduling and creating clear pathways for growth and advancement.”

“Benefits communicate what a company truly values,” she says. “We’ve built ours through ongoing dialogue with our teams, listening to what balance, growth and support mean in their lives and adapting accordingly. It’s that active care, not the policy itself, that makes people feel they belong here.”

This approach is paying off: MedPro has been recognized by various groups as a top workplace for eight consecutive years. Giraldo shares some of the specific benefits, tools and strategies that set MedPro Healthcare Staffing apart.

What are some essential benefits that draw in and retain talent?
Flexibility, whether that’s taking time off to recharge or having a schedule that adapts to life’s demands, helps people feel supported and valued. That sense of trust and understanding creates the foundation for genuine engagement and long-term commitment.

[Additionally,] when employers invest in opportunities like tuition reimbursement or professional development, it reinforces a deeper message: We care about your growth and well-being, not just the work you do each day.

How is technology becoming a crucial part of workflow efficiency?
Tools like AI-powered recruitment systems allow us to connect the right clinicians with the right opportunities faster, reducing administrative burden and minimizing delays in care. Meanwhile, digital learning and training platforms make onboarding and skill development more accessible and tailored to each professional’s needs, helping them feel confident as they step into new roles.

By streamlining these processes, technology hasn’t replaced the human element in medical care but has rather enhanced it. Clinicians gain valuable time and energy to focus on delivering quality patient care, while our internal teams can dedicate more attention to supporting and engaging our workforce. In fast-paced industries like healthcare, these tools help organizations such as MedPro maintain efficiency and a people-first approach, ensuring that clinicians feel prepared, supported and empowered every step of the way.

Aside from benefits, how can leaders strengthen the resilience of their workforce and stability of their business?
As leaders, our role is to remove barriers, listen without ego, and create the space for people to show up as their best selves, even on the hard days. It starts with care — genuine, holistic care for the people who keep the healthcare system moving and deliver essential care to patients every day.

Just as important is listening, and acting on what’s heard. When healthcare professionals feel seen, valued, and connected to their purpose, they’re not only more resilient, but more inspired to stay and grow. That’s what drives stability for both the workforce and the business.

• Key Insight: Discover how aggregating clinical and vendor data lets employers steer care and reduce costs.
• Expert Quote: “Benefits now influence hiring as much as salary,” says David Murtagh, VP Product, Claritev.
• Supporting Data: Baseline renewals add 7–10% annual health-plan cost increases if employers make no changes.
• Source: Bullets generated by AI with editorial review

Double-digit health care cost increases are no longer a future concern — they’re a present-day reality for employers of all sizes.

Across the board, benefit leaders are grappling with the same tension: How do you control runaway costs without sacrificing employee health outcomes, engagement, or trust? In this Leader’s conversation, executives and HR pros share that doing nothing isn’t really an option anymore. In fact, a “status quo” renewal now all but guarantees another 7–10% increase, before factoring in new therapies, rising utilization, and employee expectations that benefits keep pace with the modern workforce.

“As much as ever, you’ve got competition for employees and that goes beyond salaries — it definitely includes benefits,” says David Murtagh, VP product at Claritev. “You’ve got a lot of emerging point solutions that I think as people get more exposed to, they become expectations for future employers.”

“I’ve been working in HR for about 30 years and there’s been such an evolution in the providers that are available and then the laws that have been passed that have really put more of a responsibility on the employers,” says Stephanie Koch, director of human resources at Hendry Marine Industries. “I think it’s very important for HR professionals to really be empowered to understand healthcare strategy as well as they understand employee relations and performance evaluations.”

These leaders touched on one theme consistently: Employers that are getting ahead of costs are doing so by intervening earlier, steering care more intentionally, and reclaiming ownership of their data and decision-making.

Here are some key areas where benefit leaders can focus their efforts — and what concrete steps they can take next.

1. “Do nothing” is the most expensive strategy

Several panelists emphasized that annual health plan increases of 7-10% are essentially the baseline if employers change nothing. But layered on top of that are competitive labor pressures, growing expectations for richer benefits, and the steady addition of new — often costly — clinical innovations. Left unmanaged, these incremental costs compound quickly.

“I think employees want more and they want it for less,” says Sarah Michaels, chief clinical officer at Kinetiq Health. “We are facing increasing premiums, but we’re also facing increasing deductible levels out-of-pocket maximum.”

Action item for benefit managers: Treat renewal season as a strategic checkpoint, not a rubber stamp. Before accepting trend assumptions, identify your top three cost drivers from the prior year (by condition, service, or site of care) and require your broker or consultant to present at least two targeted strategies to address each one.

2. Cost control starts with data — but data alone isn’t enough

The group repeatedly returned to the idea that employers can’t manage what they can’t see. Claims, pharmacy, wellness, and point-solution data often live in silos, making it difficult to identify true cost drivers or care gaps. Even when data is available, healthcare interpreting it correctly requires expertise.

Action item for benefit managers: Push for data aggregation across medical, pharmacy, and key vendors — whether through an analytics platform or coordinated reporting. Just as importantly, secure clinical or advisory support to help translate insights into decisions, rather than expecting HR teams to “figure it out” on their own.

“The number of data sources and data points to try to figure out and get your hands around those costs are also increasing tremendously,” Murtagh says.  “That’s just not reasonable to expect most benefits managers or even benefits teams to effectively oversee. So to me, at its core, the starting point of this is a data aggregation challenge that you have to start with before you can do anything about the cost challenge.”

3. Delayed care is fueling catastrophic claims

Rising deductibles and out-of-pocket costs are leading employees to delay care — sometimes until conditions become catastrophic. Clinicians on the panel highlighted that many high-cost claimants hadn’t seen a doctor in the two years leading up to their diagnosis, a pattern that drives both worse outcomes and higher spend.

“People are not getting care until they’re really sick because they fear the cost of care,” Michaels says. “People cannot afford the cost of care today.”

Action item for benefit managers: Make primary care access as frictionless as possible. Whether through onsite or near-site clinics, telehealth, waived cost-sharing, or incentives tied to preventive visits, prioritize getting employees connected to a primary care provider early and consistently.

Read more: 2026 healthcare trends: How access to better data can redefine benefits

4. Where care happens matters as much as what care is delivered

From musculoskeletal procedures to oncology infusions, the panel underscored enormous price variation across hospitals, outpatient centers, and home-based settings — often with no difference in quality. Left unguided, employees tend to follow referrals within large health systems, unknowingly triggering higher costs.

Action item for benefit managers: Use claims data to identify high-cost services and compare prices by site of care. Then build plan incentives, direct contracts, or navigation programs that steer employees toward high-quality, lower-cost providers — especially for imaging, infusions, and surgical procedures.

“I think by taking in the data and identifying specific diagnostic codes, you can start comparing all of the hospital systems in your area about what they’re charging for specific procedures,” says Stan Jackson, chief innovation officer at Apex Benefits. “There’s a huge price variation in this marketplace. And so from that, we started creating programs and went to the highest quality lower cost providers in town and went and made direct deals with them to help steer people over to their systems whenever people needed care.”

5. A small number of members drive a disproportionate share of spend

One of the most striking insights shared was that a tiny percentage of plan members — often fewer than five individuals — can account for the majority of total plan costs. Treating all claims as inevitable misses the opportunity to intervene where it matters most.

Action item for benefit managers: Adopt a targeted intervention mindset. Work with clinical partners to identify current and emerging high-cost claimants and deploy personalized outreach, care coordination, and second-opinion pathways designed to improve outcomes while mitigating future costs.

“You’re starting to see who has a diagnosis and should be on medication but has not filled that medication for several months. No surprise, those are going to be your individuals that land in a hospital and become your hundred-thousand dollar claimant,” Michaels says. “And so we use predictive analytics both ways: Not only who are your largest claimants today, but who are going to be your largest cost claimants if an intervention is not done.”