Benefits leaders are ready to disrupt the status quo to tackle higher-than-ever healthcare costs. The reason? Those costs are expected to rise 9% in 2026, according to results from Business Group on Health’s 2026 Employer Health Care Strategy Survey, marking the second straight year for actual spending to outpace projections.
This growing financial pressure is already reshaping employer priorities. According to Willis Towers Watson’s 2025 Best Practices in Healthcare Survey, one in three employers are considering making significant changes in the next three years to healthcare programs.
For years, employers have struggled to rein in spending through sustainable cost-containment strategies, but today’s environment demands more. “It’s going to require thinking differently. “Employers are telling us that they’re willing to take more drastic actions, and they’re willing to employ more disruptive changes for the sake of lowering cost and improving quality,” says Courtney Stubblefield, Managing Director, Health and Benefits, North America, at WTW.
We talked with Stubblefield and Lindsay Lange, Senior Consulting Actuary and leader of WTW’s Healthcare Delivery Practice, about their predictions on the direction benefits leaders will take this coming year and beyond.
1. High-cost claims will continue to elevate employer health spending
High-cost claims continue to fuel medical spending, driven largely by complex conditions that require intensive treatment, advanced drugs and extended hospital stays.
Cancer care remains the top cost driver for 88% of employers, an increase of 8 percentage points in just one year, according to the Business Group on Health survey. The rise stems from the growing expense of specialty drugs, complex treatment protocols and extended hospital stays.
Musculoskeletal (MSK) care follows close behind, cited by 71% of respondents as their second-largest cost driver.
“Musculoskeletal problems often aren’t intermittent—you can be in constant pain,” explains Stubblefield. “People need treatment, and these things don’t tend to resolve on their own. So, it’s a huge category of population health need.”
Pharmacy costs are also climbing rapidly, driven largely by the growing use of high-cost drugs. These medications are reshaping employer coverage strategies and prompting new discussions about how to supply them and whether to subsidize their use. As more employees turn to GLP-1s for diabetes management and weight loss, employers are seeking ways to balance access, equity and long-term cost control.
Other major contributors to rising costs include cardiovascular disease, diabetes and mental health, all of which continue to strain employer health budgets.
In response, 59% of employers hope to implement broader cost-saving actions in the next three years, according to the WTW survey, and that will include evaluating benefits affordability (29%) and adding or enhancing vendor solutions (27%). Employers will also continue to leverage solutions to support clinical conditions with a much larger focus on cancer/oncology, growing from 33% this year to 69% by 2027.
2. Quality care will take center stage in employers’ healthcare strategy
Employers are doubling down on value-driven strategies that prioritize better outcomes and smarter spending, not just cost containment.
“It’s not just about cost,” Stubblefield says. “We have to do things that also improve quality and improve the member experience.”
“There’s an increased focus on high-value providers,” explains Lange. “The amount of data now available through transparency and quality metrics allows for greater scrutiny of the provider landscape and helps us find ways to navigate members to the high-value, high-quality providers. This is especially important for cancer as each case is highly specialized.”
The WTW survey shows 35% have already leveraged navigation support to help employees find high-quality providers, and another 26% are planning or considering navigation.
“It’s not just about cost. We have to do things that also improve quality and improve the member experience.”
3. Centers of Excellence will continue to grow in popularity
With a focus on value, quality and member experience, Centers of Excellence (COEs) are quickly becoming a cornerstone strategy for managing complex, high-cost conditions like cancer and surgery.
The Business Group on Health survey shows 84% of employers plan to offer a Center of Excellence in 2026.
“One of the biggest value-adds that some of the COE vendors have is the ability to navigate to specific surgeons and providers,” Lange says. “That’s a key focus because there’s still a lot of variability in quality and specialization, even within a facility or health system. The ability to navigate, steer and contract with specific surgeons is highly valuable.”
Employers and unions are partnering with COE programs that leverage enhanced navigation tools and data analytics to guide employees to the best site of care for their needs. When a member faces a complex diagnosis, such as cancer, musculoskeletal issues or surgery, these programs can help direct them to a COE where they’ll receive personalized care from top specialists.
Many independent COEs also include travel assistance, second opinions and virtual consultations, making it easier for employees to receive the right care without unnecessary delays or confusion.
When selecting a COE partner, Stubblefield advises employers to look beyond cost and evaluate how the vendor defines and measures quality, how the network is designed and how the program ensures a positive experience for members.
“The integration into the program for the members is really important. It has to be a seamless experience,” Stubblefield says. “We’re now seeing programs integrated and implemented in a way that feels embedded through the core of the health benefit that’s being offered by the employer. That’s key to making these successful.”
Employers must also decide whether to make COE participation mandatory for certain procedures or fully optional. While requiring procedures does lead to increased utilization and savings, many Lantern clients have found success through completely voluntary or only partially mandatory programs.
“You’re obviously going to get more volume through a mandatory or required program, and volume can be an important measure to be able to evaluate the program,” Lange says.
Many Lantern clients, for example, make bariatric surgery mandatory, but keep all other surgeries voluntary. Talk to your consultant or COE partner to determine the best approach for your team.
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4. Benefit leaders will place more scrutiny on vendors in 2026
With employee health and soaring costs at stake, employers are placing greater scrutiny on their benefit vendors, demanding stronger accountability and measurable performance. Many are evaluating what they’re really paying for, reviewing payment integrity and ensuring that fraud, waste and abuse programs work as intended.
They’re also conducting more frequent oversight of vendor performance and holding benefit vendors accountable throughout the year to ensure every dollar contributes to better outcomes.
“Having a measurement strategy is key for any vendor. It’s important to have access to transparent data and to ensure the vendor is both able and willing to share it,” Lange says. “Regularly measuring performance and conducting routine ROI calculations helps confirm that everyone continues to operate as intended.”
Employers should maintain independence when evaluating their programs. Instead of relying solely on a vendor’s data or assurances, they need to apply their own objective review process to validate performance and ensure accuracy.
“It’s critical in that measurement strategy to have both your financial, ROI or quantitative measures, as well as a set of qualitative and performance measures,” Stubblefield says. “These need to be evaluated every year and potentially added to, modified and improved on as data gets better and better.”
Contracting has become another key area of focus for employers seeking greater control and transparency. They’re paying closer attention to data rights and access, ensuring agreements clearly define how they can use their own information.
“Nothing really exists in isolation, so employers want to be able to use the experience from one program and be able to look at the impact on other programs that are tangential to it,” Stubblefield says.
5. Employers will refine overall benefits strategies to rein in costs
Employers can no longer rely on incremental adjustments or outdated strategies to control costs. The most forward-thinking benefits leaders are taking bolder steps.
“Employers are looking at how plan design, network, the employee experience, and cost management solutions like COEs and other things all come together into what we’ll call next-level benefit offerings,” Stubblefield says. “The goal is to maximize value under the plan and ultimately control cost over time.”
Insights from the Business Group on Health survey and leading benefits consultants support key 2026 benefits predictions: Employers will focus on value, transparency and measurable results. They’ll do this by partnering with vendors who demonstrate real impact, guiding employees to higher-quality care through Centers of Excellence and ensuring every dollar spent drives better health outcomes.
The year ahead offers both challenges and opportunities. Employers that act decisively today by demanding more from their partners and embracing value-driven strategies will be best-positioned to control costs and deliver meaningful employee health benefits.
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