Healthcare costs have been steadily climbing for years, but 2026 is shaping up to be another challenging year for employers and brokers. Premiums for employer-sponsored coverage are projected to rise due to both medical cost inflation and shifts in the health insurance marketplace. These increases will not only affect company budgets but also influence employee satisfaction and retention. For many organizations, rising premiums mean tougher choices about how much of the burden to absorb versus pass on to employees. Brokers and HR leaders who anticipate these trends and prepare accordingly will be better equipped to navigate the changing landscape. This article outlines what is driving premium increases in 2026 and highlights strategies to help employers and brokers manage the impact.

Key Drivers Behind 2026 Premium Increases

One of the largest forces behind rising premiums is the cost of healthcare itself. Hospitals, physician practices, and outpatient centers continue to raise prices, in part due to higher labor costs and increased demand for services. Prescription drugs, particularly high-cost specialty medications and GLP-1 therapies, are becoming a larger share of claims spending. These rising expenses directly influence insurer rate filings, which in turn push premiums higher for both employers and employees.

Broader economic trends are also at play, including:

• Inflation, which has raised provider reimbursement rates

• Staffing shortages and provider consolidation, which reduce competition and raise prices

• Shrinking risk pools, especially when younger, healthier members leave employer plans — increasing average costs for those who remain

Together, these factors mean that employers should expect another round of increases in 2026, even if they vary by region and insurer.

What It Means for Employers

For employers, higher premiums translate into difficult financial decisions. Companies that cover a large share of employee premiums may face significant increases in overall benefits spending, forcing them to adjust budgets or reconsider other areas of compensation. Smaller employers, in particular, may find that the rising cost of health insurance makes it harder to compete with larger organizations that can spread costs across a bigger workforce. Even large employers are not immune, as consistently rising premiums strain long-term cost projections.

Employees are also likely to feel the impact. As premiums increase, employers may shift more costs to workers through higher payroll deductions or less generous plan designs. This can create dissatisfaction if employees feel their benefits are eroding or becoming less affordable. In a competitive job market, higher employee contributions may also affect recruitment and retention. Employers who fail to address these challenges risk not only higher costs but also decreased employee morale and productivity.

Strategies to Mitigate Impact

The first step for employers is to evaluate whether current plan designs are still meeting the needs of both the organization and its workforce. High-deductible health plans (HDHPs) paired with Health Savings Accounts (HSAs) remain a popular way to control premiums while empowering employees to manage healthcare costs more directly. Level-funded or partially self-insured plans are also gaining traction, especially among mid-sized employers, because they offer more flexibility and can reduce costs for groups with healthier-than-average populations. Brokers can play an important role in guiding employers through these options and modeling potential savings.

Another effective strategy is to focus on employee education and engagement. Many employees underutilize tax-advantaged accounts like HSAs and FSAs, either because they don’t understand the benefits or haven’t received clear guidance. Employers can help workers stretch their dollars by offering training sessions, benefit calculators, or one-on-one support during open enrollment. Brokers can support this effort with communication materials and tools that demystify complex choices. By helping employees maximize the resources already available to them, employers can soften the blow of higher premiums.

Employers should also consider investing in wellness initiatives and preventive care programs that help reduce long-term claims. Examples include:

• Encouraging routine preventive screenings

• Offering virtual care and telehealth options

• Promoting healthy lifestyle or wellness programs

• Providing digital tools that support access and affordability

While these investments may not immediately offset premium increases, they build a foundation for healthier employees and lower claims in the future. The key is to treat rising premiums not as an isolated problem but as part of a broader workforce health strategy.

The Role of Brokers and Advisors

Brokers are uniquely positioned to help employers navigate the complexity of rising premiums. With access to market data and carrier negotiations, brokers can identify plan options that balance cost savings with coverage quality. They can also help employers compare funding arrangements, evaluate stop-loss coverage, and design benefit packages that align with workforce needs. By acting as strategic partners rather than transactional intermediaries, brokers can add significant value in a high-cost environment.

Communication is another critical area where brokers can make a difference. Rising premiums are stressful for both employers and employees, but clear, proactive communication helps manage expectations. Brokers can provide employers with talking points and materials that explain why costs are increasing and what steps are being taken to manage them. They can also help HR teams frame benefits changes in a way that emphasizes value rather than simply focusing on higher costs. By keeping all stakeholders informed, brokers strengthen trust and maintain long-term client relationships.

Supporting Employees Through Change

As premiums rise, employees may worry about how much more will come out of their paychecks and whether their coverage is still worth it. Employers can help by providing tools that make healthcare costs more predictable and manageable. Encouraging employees to use HSAs or FSAs, explaining how preventive care is covered, and highlighting cost-effective care options are all ways to reduce financial anxiety. Some organizations are also introducing financial wellness programs that include healthcare budgeting support, recognizing that benefits are part of a larger financial picture.

Supporting employees through these changes requires empathy and transparency. HR teams should be prepared to answer questions and offer guidance during open enrollment, rather than leaving workers to figure out rising costs on their own. Employers that demonstrate a commitment to helping employees navigate higher premiums are more likely to retain talent and maintain a positive workplace culture. Rising costs may be unavoidable, but the way they are handled can make a major difference in employee perception and satisfaction.

Looking Ahead to 2026

The premium increases expected in 2026 present real challenges for employers, brokers, and employees alike. While cost drivers like inflation and specialty drug expenses are outside of any one organization’s control, there are meaningful steps employers can take to manage the impact. Rethinking plan design, educating employees, and investing in wellness programs all contribute to a more sustainable benefits strategy. Brokers who position themselves as trusted advisors will be essential in helping employers navigate this complex environment.

At Lively, we believe that rising healthcare costs don’t have to mean fewer options or less security. By equipping employees with the right tools and resources, employers can help their teams adapt to changes without losing confidence in their coverage. Preparing now will not only ease the transition into 2026 but also strengthen your benefits strategy for the years to come.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.