As employer healthcare costs head toward a near 10 percent rise, HR leaders face hard choices on cost-sharing – and harder ones on how to explain them
US employers are bracing for the steepest rise in healthcare costs in over two decades. It’s now up to HR teams to manage the numbers and to communicate what’s changing and why.
According to WTW’s 2026 Best Practices in Healthcare Survey, released October 28, 2026, US employers project healthcare costs will climb 11.1 percent in 2027 before plan changes. After adjustments, the projected rise is still 9.7 percent – the highest rate since the early 2000s and nearly three times the current pace of wage growth.
What employers are planning on healthcare costs
The WTW survey ran between June and August 2026, drawing responses from 471 US employers with at least 100 employees. It found that 85 percent are planning or considering shifting costs to employees through premium contributions by 2028, compared to 44 percent doing so today.
A further 71 percent are considering increasing out-of-pocket expenses, up from 30 percent currently. Forty-one percent are thinking of removing some generous coverage provisions.
Share of U.S. employers planning or considering each measure
Premium contribution shifts
Out-of-pocket increases
Steering employees to high-value providers
Eliminating generous coverage provisions
Eligibility restrictions
Source: WTW 2026 Best Practices in Healthcare Survey (June–August 2026, n=471 U.S. employers). Figures represent employers planning or considering each measure.
Pharmacy spending is a primary driver. Employers expect those costs to rise 11.5 percent in 2026, up from 9 percent the year before. WTW estimates pharmacy now accounts for roughly a third of all healthcare claims, including drugs processed through medical benefits.
Coverage for glucagon-like peptide-1 (GLP-1) drugs for weight loss fell for the first time in three years, from 57 percent of employers to 53 percent. Of those who no longer offer GLP-1 coverage or are actively reconsidering it, 91 percent point to cost.
For HR teams managing rising benefits costs and smarter compensation strategies, plan changes are coming. The question is how to implement them without damaging the workforce.
How should HR communicate healthcare cost increases to employees?
Benefits restructuring, particularly cost-shifting, risks damaging trust and triggering turnover if handled poorly. HR leaders would do well to lead with honesty about the pressures driving change. Showing workers the specific forces at play – specialty drug spending, high-cost claims, hospital pricing – grounds the conversation in fact rather than perception.
Communicating earlier in the planning cycle, rather than at open enrollment, reduces confusion and resentment. Layered messaging across managers, benefits platforms, and direct channels helps ensure changes are received clearly.
WTW’s separate 2026 Global Benefits Attitudes Survey found that most workers – 58 percent – preferred paying more out of pocket over accepting a narrower plan. Workers are more receptive to cost-sharing than employers may assume, provided the trade-off is framed clearly.
Where HR can fill the gap
As some coverage shrinks, HR teams have a real opportunity to offer lower-cost alternatives that protect employee wellbeing without adding to the claims burden. Mental health support through employee assistance programs (EAPs) is frequently underused. Preventive care campaigns focused on chronic condition management can reduce the high-cost claims driving premiums higher for everyone.
WTW’s survey found that 63 percent of employers are planning or considering steering employees toward high-value providers by 2028, up from 21 percent today. HR can accelerate that shift by making those options visible well before plan changes take effect.
For employers concerned about talent acquisition, the strategy extends to recruitment – being direct about benefits trade-offs signals credibility to applicants. Candidates expect honesty, not spin.
WTW’s Courtney Stubblefield, strategy and specialty leader for health and benefits at WTW, said that plan design tweaking and cost-shifting alone cannot meet the objective.
“Employers need a multi-year strategy with finance at the table that delivers a proactive plan for pharmacy and other high-cost risks and holds vendors accountable for results,” Stubblefield said. “Employers should start by asking whether they are getting enough value from the money already being spent.”
For further context on how the industry is responding, see how US employers are tightening their grip on benefits spending as healthcare costs surge.
A reactive message at open enrollment is not a strategy. A year-round, structured approach to benefits education is what will separate employers who manage rising healthcare costs well from those who don’t.
