2026 Emerging as a Year of Change for Employer Health Plans – Let’s Open the Door to Innovation

Heading into 2026, rate hikes are proving far more disruptive than many anticipated. Employers are facing 15–20% increases, and the traditional tools used to manage healthcare costs are no longer sufficient. This isn’t just another tough renewal cycle; it reflects a broader shift in how the system is functioning.

Across the country, our distribution partners are hearing the same concerns from clients. Employers are being hit with increases they haven’t had to manage in decades, and many are only now recognizing how fragile the past decade of relatively stable renewals really was.

History shows that periods like this often lead to reinvention. Anyone who lived through the employer-benefits landscape of the 1990s or early 2000s recognizes the pattern. When costs rise relentlessly, employers don’t simply trim around the edges; they rethink how plans are built. HMOs emerged out of necessity. Consumer-driven plans, which introduced HSAs and HRAs to give consumers more direct control over healthcare spending, gained traction because the old system was collapsing under its own weight.

Today’s pressures are broader and more complex. Costs are rising across every segment of the health insurance ecosystem, with a significant share driven by specialty pharmacy and other very high-cost claims. New therapies—particularly in oncology, autoimmune disease, and GLP-1s—are clinically exciting and effective, but extraordinarily expensive. These therapies are now a major driver of renewal increases. Providers are strained, carriers are absorbing volatility, and employers are facing cost-shifting that no longer feels sustainable.

Alternative plan architectures have proven themselves in pockets, yet adoption has lagged. At the same time, the range of viable options available to employers has widened considerably. ICHRA strategies, level-funded and fully insured hybrids, reference-based pricing, direct primary care, virtual-first plans, captives, and other emerging structures are no longer theoretical. Provider-network innovation, steerage models, and layered cost-containment strategies already exist and are increasingly being reconsidered.

Employers are revisiting models they might not have considered a year ago. Brokers are reassessing long-standing playbooks as clients demand clearer answers. Solutions that once struggled to gain traction are now being evaluated more seriously as cost pressures mount.

Care delivery is also evolving alongside plan design. New players are reshaping how patients access care across both general and specialty or disease-centric models. Virtual-first approaches, condition-specific programs, and alternative care pathways are beginning to change utilization patterns and cost dynamics.

How health plans contract with providers continues to change too. Value-based arrangements, risk-sharing models, and more transparent contracting structures are gaining traction, with employers increasingly pushing for accountability tied to outcomes rather than volume alone.

Another area receiving greater attention is the use of more flexible financial approaches to help manage volatility from high-cost claims. These models, called Adaptive Capital for High-Cost Healthcare, reflect a broader effort by employers to better navigate unpredictable expenses without relying solely on blunt cost-shifting.

Into 2026, we should expect more employers to test and validate solutions that have been quietly building evidence. Experimentation across level-funded structures, next-generation TPAs, MGUs, captives, and hybrid risk models is likely to continue, alongside a shakeout among offerings that are no longer fit for today’s cost environment. 

So looking ahead, the path forward lies not in incremental fixes but in broader innovation across plan design, care delivery, cost management and healthcare financing.