
As health benefit costs continue to surge, Mercer's research reveals that employers face tough decisions regarding their 2026 benefit offerings
In recent years, the tight labor market and concerns about healthcare affordability have made employers reluctant to reduce the value of health benefits by raising deductibles or making other changes that shift more responsibility for healthcare cost to employees. But this year, more employers seem likely to use this tactic to slow health plan cost growth. Half (51%) of large employers (those with 500 or more employees) say they are likely or very likely to make plan design changes in 2026 that would shift more cost to employees, such as raising deductibles or out-of-pocket maximums. That's up from 45% in last year's survey.
'Employers project average health benefit costs to grow by nearly 6% this year, and 2026 may be even more challenging from a cost perspective,' said Ed Lehman, Mercer's US Health & Benefits Leader. 'While short-term cost containment actions might be needed to address current budget realities, we also see some employers using longer-term strategies, such as offering narrow network plans, that emphasize high-quality, high-value care. These strategies may improve health outcomes or make healthcare more affordable for employees."
Some employers will pursue other strategies to slow cost growth. According to the survey, 35% of large employers will offer a non-traditional medical plan option in 2026 that seeks to provide employees with higher-quality, more cost-efficient care. Employers offer these alternative plans to provide choices to employees with a range of medical and financial needs. Variable copay plans are one example and typically offer no or low deductibles and set copayments for services based on individual providers' fees. These copays are fixed and communicated up front, giving members the opportunity to select lower-cost providers.
The survey found that among the 6% of large employers currently offering a variable copay plan, 28% of their covered employees, on average, chose to enroll in them in 2025.
Weight-loss medication cost is a top concern
Sharp growth in the utilization of glucagon-like peptide 1 (GLP-1) drugs for the treatment of diabetes and obesity is having a significant impact on prescription drug benefit costs. While employers have long covered GLP-1 drugs for diabetes, fewer than half (44%) of large employers cover the drugs specifically approved to treat obesity. Given the high cost of these drugs (about $1,000 per month per patient, not counting manufacturers' rebates, which vary), and the large number of plan members that could potentially benefit from them, managing this cost is by far the top priority in pharmacy benefits among survey respondents, with 77% saying it is extremely or very important.
'While the trend over the past couple of years has been to add coverage for GLP-1s approved for weight-loss, some employers facing large cost increases in 2026 may feel this coverage is out of reach,' says Alysha Fluno, Mercer's Pharmacy Innovation Leader. 'Employers are weighing the immediate costs of covering these drugs against the potential for generating savings down the road once their workforce's health improves.'
More broadly, some employers are evaluating new approaches to providing and managing the costs of pharmacy benefits. Well over half of large employers (61%) are now actively exploring some type of alternative to standard pharmacy benefit contracts that would potentially provide greater clarity about the cost of drugs or specific services offered by pharmacy benefit managers.
Well-being and mental health continue to be a priority
Employers remain committed to helping employees manage stress and build coping skills, which may help prevent the onset of more serious mental health issues. More than 75% of large employers will offer digital stress management or resiliency resources in 2026, such as mindfulness and meditation apps, or apps grounded in cognitive behavioral therapy. Half (51%) will offer in-person or live online resources for stress management and resiliency, such as individual or group training sessions or coaching.
Employers are also providing training for managers on how to recognize employees who are struggling with their mental health, offer support and direct them to resources. This type of training is increasingly recognized as a strategy for fostering a healthy workplace. Nearly 40% of all large employers surveyed – and 60% of those with 20,000 or more employees – conduct mental health training for managers. These efforts may be a response to a growing need. According to Mercer's research, nearly half (45%) of US employees feel stressed most days at work.
About Mercer's Survey on Health and Benefit Strategies for 2026
This study includes 711 US-based organizations (504 organizations with 500 or more employees and 207 organizations with fewer than 500 employees). The study was fielded between April 8 and April 25, 2025. Click here to learn more.
About Mercer
Mercer, a business of Marsh McLennan (NYSE: MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit mercer.com, or follow on LinkedIn and X.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Hill
3 minutes ago
- The Hill
The FDA must crack down on dangerous knockoff weight-loss drugs
For the first time, there is real hope in the fight against obesity. New data from the Centers for Disease Control and Prevention's National Center for Health Statistics shows that adult obesity rates in the U.S. may finally be flatlining after annual increases since at least 2011. Obesity has long been understood to be the second leading cause of preventable death in America. Neither negative cultural attitudes about weight nor government messaging campaigns about diets have helped curb it. Yet like most insurmountable problems, we are innovating our way out of it. Experts believe a significant part of recent progress is due to powerful new medications such as Ozempic and Mounjaro, known as GLP-1 drugs. But just as these drugs are changing lives, a dangerous shadow market is growing alongside them. Compounded versions, which are copies of the original drugs made in smaller pharmacies, are flooding websites, med spas and clinics. These versions are often cheaper and easier to get than the real thing. They are also frequently untested, poorly regulated and, in many cases, illegal. The FDA has received more than 500 reports of serious side effects tied to compounded semaglutide and tirzepatide, the active ingredients in Ozempic and Mounjaro. Some patients have landed in the hospital after taking the wrong dose. That is not surprising when you consider that many of these vials come without proper labels or instructions. In 2023 alone, poison control centers received nearly 3,000 semaglutide-related calls, a huge jump from previous years. Many of those cases involved compounded or mislabeled versions of the medication. There are also serious concerns about what is actually in these products. The FDA has warned that some pharmacies are using different chemical forms of semaglutide, called salt forms, that are not approved for use and may not be safe. In April 2025, the agency seized counterfeit Ozempic from the U.S. supply chain after discovering that some vials contained the wrong ingredients or were contaminated with dangerous bacteria. These are not technical violations. They are real risks to people's health. During earlier shortages, compounding was allowed under special circumstances. But those shortages have ended, and the FDA has ordered most pharmacies to stop making these versions. Despite that, many continue to operate in legal gray zones or offer these drugs online. The harm does not stop with safety concerns. This trend also threatens future breakthroughs in obesity care. Companies like Novo Nordisk and Eli Lilly spent years and billions of dollars to develop these treatments. Now, they and others are working on new and even more effective drugs. When unapproved copies flood the market, it becomes harder to fund innovation. If investors cannot count on fair returns, the next generation of such medications may not make it out of the lab. Perhaps the biggest risk is to public trust. When someone has a bad experience with a fake or contaminated version, they may begin to doubt all weight loss innovations. That fear can ripple through the health system, making insurers and doctors more hesitant to support treatments that are helping with the genuine public health emergency of obesity. None of this means that compounding should disappear. It has a place when patients have specific medical needs that cannot be met by the approved versions, such as allergies or special dosing requirements. But what is happening now is not about rare exceptions. The FDA should continue cracking down on compounders that use unapproved ingredients or sell mislabeled products disguised as 'research chemicals.' At the same time, insurers and lawmakers need to make the real thing more affordable by removing middlemen such as pharmacy benefit managers. No one should have to choose between risking their health and going broke. We are finally making progress against a disease that affects nearly half the country and has stumped policymakers and advocates for decades. But progress is fragile. Unregulated versions of GLP-1s cannot be allowed to dominate the market. We risk undoing the progress reported by the CDC in the fight against obesity, and if we get this right, the trend could be reversed. That means longer lives for more people, lived in dignity and to the fullest.
Yahoo
an hour ago
- Yahoo
Labcorp Holdings Second Quarter 2025 Earnings: Revenues Beat Expectations, EPS Lags
Labcorp Holdings (NYSE:LH) Second Quarter 2025 Results Key Financial Results Revenue: US$3.53b (up 9.5% from 2Q 2024). Net income: US$237.9m (up 16% from 2Q 2024). Profit margin: 6.7% (up from 6.4% in 2Q 2024). The increase in margin was driven by higher revenue. EPS: US$2.85 (up from US$2.44 in 2Q 2024). Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. All figures shown in the chart above are for the trailing 12 month (TTM) period Labcorp Holdings Revenues Beat Expectations, EPS Falls Short Revenue exceeded analyst estimates by 1.2%. Earnings per share (EPS) missed analyst estimates by 12%. Looking ahead, revenue is forecast to grow 4.5% p.a. on average during the next 3 years, compared to a 6.3% growth forecast for the Healthcare industry in the US. Performance of the American Healthcare industry. The company's shares are up 8.7% from a week ago. Risk Analysis You should learn about the 2 warning signs we've spotted with Labcorp Holdings. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
an hour ago
- Yahoo
Integer Holdings' (NYSE:ITGR) earnings growth rate lags the 11% CAGR delivered to shareholders
While Integer Holdings Corporation (NYSE:ITGR) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 12% in the last quarter. But at least the stock is up over the last five years. Unfortunately its return of 65% is below the market return of 100%. While the stock has fallen 3.5% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During five years of share price growth, Integer Holdings achieved compound earnings per share (EPS) growth of 1.4% per year. This EPS growth is slower than the share price growth of 11% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth. This optimism is visible in its fairly high P/E ratio of 45.37. The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image). It might be well worthwhile taking a look at our free report on Integer Holdings' earnings, revenue and cash flow. A Different Perspective While the broader market gained around 19% in the last year, Integer Holdings shareholders lost 7.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Integer Holdings (1 doesn't sit too well with us) that you should be aware of. Of course Integer Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data