Beyond Renewal: Building a Long-Term Health Benefits Strategy
For many employers, health plan renewal has become an annual exercise in difficult tradeoffs. Decisions such as raising deductibles, increasing employee contributions, or changing carriers may provide short-term relief, but they are not sustainable. Too often, they leave HR leaders facing the same challenges at the next renewal. Findings from our 2026 Mid-Market Benefits Benchmarking Survey underscore the need for a multiyear health benefits strategy.
Plan Design Matters, but It May be a Temporary Fix
Employers continue to face higher provider costs, more high-cost claims, rising pharmacy spending, and greater plan utilization. Together, these pressures have contributed to several consecutive years of elevated cost increases. The trend shows little sign of slowing, with median employer healthcare costs projected to increase 9% nationally and 6% regionally after plan design changes.
In response, our survey found that more employers are offering qualified high-deductible health plans alongside a PPO. While these options can provide greater flexibility and lower premiums, they do not address the underlying cost drivers. Repeatedly increasing deductibles and out-of-pocket limits can also make coverage more difficult for employees to use, creating tension with recruitment, retention, and employee well-being goals.
Greater Transparency, Flexibility, and Control
One of the survey’s key findings was a significant shift toward self-insured funding arrangements. Across the Southeast, the percentage of employers using self-funding vehicles increased from 44% in 2022 to 63% in 2026. This movement was evident across group sizes and reflects a broader desire for greater transparency, flexibility, and control over health plans.
Employers have a range of plan financing options to consider, from fully insured plans to traditional self-funding. For mid-market companies that value elements of both approaches but may not be ready to assume the full risk of self-funding, group captives and stop-loss coverage may offer additional options. These strategies allow organizations to determine how much risk they are prepared to retain.
The strategic value of these arrangements extends beyond the potential to reduce fixed insurance costs. Greater access to claims and pharmacy data can help employers understand what is driving their plan performance. These insights can support more targeted decisions related to care management, pharmacy programs, sites of care, vendor partnerships, and employee education.
Annual Reaction Versus a Multiyear Roadmap
In today’s health benefits landscape, employers should shift from asking, “How can we mitigate this year’s renewal increase?” to asking, “What do we want our benefits program to accomplish over the next three to five years, and what changes will help us achieve those goals?”
As employers consider that question, several priorities should guide the conversation:
- Understand the cost: Identify the medical, pharmacy, utilization, and high-cost claimant factors influencing the plan.
- Protect affordability: Evaluate both payroll deductions and point-of-care costs to determine where employees face the greatest barriers.
- Define business goals: Determine whether the primary objectives are recruitment, retention, employee satisfaction, financial stability, or a combination of priorities.
- Evaluate financing: Compare funding options based on transparency, control, cash flow, risk tolerance, and administrative capacity.
- Measure progress: Establish financial, clinical, and employee experience measures, then review performance throughout the year rather than only at renewal.
Benchmarking Informs Strategy, but There is Still Work to be Done
The 2026 survey provides a broad market perspective, with more than 6,400 participating companies representing nearly one million employees and $15.6 billion in healthcare spending. However, benchmarks alone cannot determine the right approach for an organization and its unique challenges. The most valuable next step is to pair market data with company-specific insights and build a roadmap that aligns cost management with organizational goals.
Persistent cost pressure calls for more than another round of plan changes. It requires a deliberate strategy that gives employers greater visibility into their health plan and more opportunities to influence long-term performance. Our Benefits Consultants partner with employers to understand their businesses and unique challenges, evaluate plan options and cost drivers, and help them make informed decisions that fit their organizations and their people.
