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What Every Employer Needs to Know About Benefits in 2026

  • 8 hours ago
  • 3 min read

The employee benefits landscape is facing a perfect storm in 2026. Healthcare costs are accelerating, landmark legislation is reshaping plan design, and employees are demanding more from their employers than ever before. At the same time, AI is fundamentally changing how HR teams operate.

 

Our 2026 Employee Benefits Trends Report breaks down the forces shaping the year ahead — and gives employers a clear roadmap for staying compliant, competitive, and cost-effective.


Healthcare Costs Are Rising — Here's Why

Industry projections put healthcare cost increases at 6.5%–10% in 2026. That's not a one-time spike — it's the result of compounding pressures that employers can't afford to ignore.

 

Key drivers include:

  • GLP-1 medications (like Ozempic) — prescriptions tripled since 2020, costing ~$1,000/month per person

  • Specialty drugs — comprising ~50% of total drug spend, with ~80% of 2025 FDA approvals in this category

  • Cancer care — increasing among working-age individuals with treatments costing hundreds of thousands per patient

  • Healthcare labor shortages — labor accounts for 56% of hospital expenses, driving up reimbursement rates

  • Chronic conditions — affecting 6 in 10 adults and accounting for 90% of the nation’s $4.9 trillion annual healthcare costs

 

The good news: informed employers who act proactively can manage financial impact without gutting their benefits. Our report outlines five employer strategies — from specialty pharmacy management to alternative funding models — that are making a real difference.

 

Major Regulatory Changes Are Already in Effect

2026 is one of the most significant years for benefits compliance in recent memory, driven primarily by the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025.

 

Here's a snapshot of what's changed:

  • HSA Expansion: Telehealth is now permanently covered pre-deductible for HDHPs. Direct Primary Care (DPC) integration is now permitted.

  • Dependent Care FSAs: Limits increased from $5,000 to $7,500 — the first increase since 1986.

  • Student Loan Assistance: Employer-sponsored student loan payments are now permanently extended.

  • Trump Accounts: A new tax-advantaged savings account for children under 18, with employer contribution options.

  • ACA Reporting Relief: Employers no longer need to automatically distribute individual statements if proper notice is posted.

Beyond the OBBBA, employers are navigating mental health parity uncertainty, expanding state paid leave laws, healthcare transparency requirements, and growing PBM scrutiny. The compliance landscape demands flexibility and proactive planning.

 

Employees Want More — And They’re Choosing Employers Who Deliver

Today’s workforce, dominated by Gen Z and Millennials, has fundamentally different expectations around benefits. Wellness is no longer a perk — it’s a strategic differentiator.

 

Fertility Benefits

2 in 3 employers plan to invest in family health benefits within the next three years — a 44% increase since 2024. With infertility affecting 1 in 6 people globally, and new federal guidance expanding how employers can offer stand-alone fertility benefits, this is an area of rapid growth.

 

Mental Fitness

The conversation has shifted from mental health crisis response to mental fitness — proactively building resilience. More employers are offering coaching, dedicated mental fitness days, and expanded EAPs.

 

Women’s Health

Only 40% of organizations currently offer fertility services, 49% provide prenatal support, and just 21% offer menopause-specific support — despite growing demand from Gen X, Millennial, and Gen Z workers alike.

 

Financial Resilience

75% of Americans fell short of their financial resolutions in 2025. Employers offering student loan repayment, emergency savings programs, and financial education workshops are seeing stronger engagement and retention.

 

AI Is Reshaping Benefits Administration

40% of HR leaders already use AI for benefits administration, and the pace of adoption is accelerating. AI is enabling:

  • Personalized benefits recommendations based on employee health data and preferences

  • Predictive analytics that forecast attrition, skill gaps, and hiring needs

  • Automation of payroll processing, enrollment, and compliance reporting

  • 24/7 employee self-service through AI-powered virtual assistants

 

But employers must approach AI implementation thoughtfully — with transparent data policies, investment in employee training, and realistic expectations. 60% of firms report minimal measurable gains despite significant investment, underscoring the importance of strategy over adoption for its own sake.

 

Get the Full 2026 Employee Benefits Trends Report

This article covers only the highlights. The full report goes deeper on every topic — with specific employer action items, data, compliance checklists, and strategic frameworks to guide your 2026 planning.

Download the 2026 Employee Benefits Trends Report to get:

 

  • Detailed cost management strategies with real-world data

  • OBBBA compliance action items by benefit type

  • State-by-state leave law guidance

  • Fertility and wellness benefit benchmarks

  • AI implementation considerations for HR teams

 

Questions about how these trends affect your organization? Contact a Cottingham & Butler advisor today.

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