Nearly three-quarters (73 per cent) of benefits managers are reporting more pressure due to higher health-care costs now than at any point in the past 10 years, according to a new survey by WTW.
The survey, which polled more than 400 employers, found a third (34 per cent) believe it will be necessary to make significant changes over the next three years, compared to just 14 per cent that made such changes in the previous three years. The need for action is especially pronounced among companies experiencing the greatest cost pressure, with nearly 60 per cent of these employers planning to pursue major changes to better control health-care costs.
Read: Global health benefits costs projected to rise by 9.8% in 2026: report
Notably, more than three-quarters (77 per cent) of employers are concerned that tariffs could increase overall costs and nearly half (46 per cent) are worried about the reduced access to various pharmaceuticals. While concerns remain, few employers (15 per cent) have yet to respond to U.S. tariff and trade policies and a third (33 per cent) are considering changes in the near future.
The survey noted few companies have taken steps that would reduce the value or restrict access to benefits. Only eight per cent tightened eligibility provisions and just four per cent scaled back coverage that was more generous than average.
Nearly three-quarters of companies have audited their medical plans in the past year or plan to do so within the next two years and evaluations targeting fraud, waste and abuse are expected to increase from 10 per cent in 2025 to 42 per cent by 2027.
With net annual costs of US$7,000 to $8,000 per user, many employers are taking a hard look at how to rein in spending on glucagon-like peptide-1 receptor agonist medications. Six per cent of employers said the costs have become unsustainable and made the decision to remove coverage of GLP-1s for obesity. A tenth (nine per cent) of employers are considering a similar action by 2027.
Read: How benefits plan sponsors, insurers are managing newer — and effective — GLP-1 medications
Six in 10 (59 per cent) employers said they view financial incentives as essential to building a company culture of health and well-being, while 47 per cent believe they’ve been effective at encouraging healthier lifestyles and a fifth (23 per cent) believe financial incentives have been effective at reducing health-care costs.
The majority (80 per cent) of employers believe artificial intelligence will fundamentally change how health-care benefits are managed in the next three years and 90 per cent believe AI will transform benefits management by 2030.
Employers cited navigation and personalized decision support (67 per cent) as the greatest AI opportunity, followed by tools and education to improve employee experience (64 per cent) and providing information about health-care programs and benefits (61 per cent).
Read: North American employers prioritizing employee productivity, benefits costs in 2025: report