Trends and Issues for US Employer Insurance: Forecasting 2026-2030 Health Care Coverage

J Clin Pathways. 2025;11(6):38-42. 

In the health plan year 2025, health care stakeholders faced the lingering effects of the COVID-19 pandemic, a change in presidential and congressional party leadership, and artificial intelli­gence (AI)’s growing integration in health care. In addition, the rapid growth of the GLP-1 drug category overshadowed the im­pact of biologic-based products, especially cancer therapeutics.

These market factors focused the attention of business leadership, human resource departments (HR), and company boardrooms beyond health care costs. Such dynamic changes in this marketplace—shifts in regulation or law and economic ramifications—require a more robust understanding of roles, responsibilities, and available time for all business sector leaders to sustain their business through 2025 into 2026.

This column will review health care stakeholders’ final pri­orities for 2025 and the transition to a more complex business­-driven shift in risk mitigation for 2026 health care coverage.

In August, Law firm Fisher Phillips posted a to-do list for em­ployers regarding workplace law developments and upcoming compliance dates for the remainder of 2025.¹ The listed items affect multiple C suite areas and business boards, including HR committees and operating executives. The firm notes that in 
general, all companies need to watch for major changes from the National Labor Relations Board.

Key to-do items that all employers should be aware of according to the firm include:

1. Take note of recent US Supreme Court (SCOTUS) decisions. For instance, SCOTUS allowed continued enforcement of the Affordable Care Acts’s (ACA) preventive-care mandates, aligning with the priorities of Make America Health Again and US Food and Drug Administration chronic disease efforts.
2. Get familiar with “America’s AI Action Plan.” This is the White House’s strategy to “safeguard your business from AI hallucinations and how to align your AI governance practices with strong data minimization principles,” according to Congressman Jay Obernolte.
3. Follow through with the revived Department of Labor program that rewards self-reporting from auditing the Fair Labor Standards Act and Family and Medical Leave Act compliance.
4. Learn how the “Big Beautiful Bill” federal legislation may impact your workplace.
5. Beware of deregulation as many bans or regulatory actions may not be fully eliminated, including any of President Donald Trump’s executive orders.

In a similar vein, Foley & Lardner LLP published “2025 Health Care & Life Sciences Top Trends,” highlighting the fol­lowing developments:

• Government enforcement and health care litigation under the Trump Administration
• The end of Chevron deference
• Health technology trends, including telehealth and digital health policy
• AI in health care and life sciences (eg, medical devices, pharmaceuticals, and the biopharmaceutical industries)
• Medicare payment model trends and economic drivers

With this list, the firm’s aim is to help businesses capitalize on opportunities and navigate potential pitfalls in an uncertain regulatory and litigation landscape.² These risk management efforts can support a welcoming and thriving workplace that leads to a successful company.

Employer of Record and Global Professional Employer Organizations

In the current economic climate, companies have been increas­ingly tasked with reassessing their approach to business success. Despite global economic uncertainty, most business leaders pri­oritized growth and increasing their financial commitment to­ward hiring throughout 2024.^3,4 However, this priority shifted 
in 2025 to leverage cost efficiency.

More business leaders are adopting a “global growth mind­set.” Small- and medium-sized businesses alike are taking advantage of global expansion to navigate common challenges such as talent shortages.⁵ In addition, many companies are seek­ing an alternative to streamline HR functions such as hiring, recruiting, and compliance.⁶

Companies looking to quickly expand their workforce can try to partner with an employer of record (EOR) or a global professional employer organization (PEO) to effi­ciently manage HR needs while saving time and money.⁷ A PEO is a company that co-employs individuals with another company that already has its own registered entity. There are currently over 500 PEOs in the US alone.⁸ While a PEO only assists with employer responsibilities and certain HR tasks, an EOR handles all HR-related tasks to streamline day-to-­day operations. 

Individual Coverage Health Reimbursement Arrangements and Alternative Funding Programs

Employers are also looking at alternative coverage options to adapt to market changes. One option is Health Reimbursement Arrangements, which are “skinny plans” that offer mostly cata­strophic coverage. Individual Coverage Health Reimburse­ment Arrangements have also received much attention from pharmaceutical companies, their advisors, and vendors; how­ever, they lack an understanding of the employer marketplace perspective. The concept sounds great to those who don’t un­derstand insurance risk markets, but it represents a minority of businesses, mostly smaller employers.

Alternative funding programs (AFPs) are increasingly be­ing discussed as another solution, particularly for higher cost biologic therapies, managing the costs of specialty medications, and for those without standard commercial insurance cover­age.⁹ However, AFPs, along with other emerging risk-based so­lutions or so-called direct to consumer web platforms, tend to be short-term band aids for pharma/biotech firms rather than solutions to root cause problems. In addition, premium costs and out-of-pocket (OOP) costs will likely go up for members (patients) as part of these programs.

AFPs are often used by self-funded employer plans and involve a third party to manage high-cost specialty drugs.⁹ They may exclude these drugs from the plan and help employees ob­tain them through other means, like patient assistance pro­grams. However, there are concerns that AFPs can create barriers to accessing medications, increase patient costs, and di­vert funds. It is important to research any program thoroughly, understanding potential impacts on costs and access to neces­sary medications.¹⁰

Common types of AFPs include the following:

• Patient Assistance Programs: Sponsored by pharmaceutical companies or nonprofits, these programs provide free or discounted medications to those unable to afford them, often assisting uninsured or underinsured patients.
• Copay Assistance Programs: Typically offered by drug manufacturers, these programs help patients cover OOP costs for prescriptions.
• Foundations and Nonprofit Organizations: These groups may offer financial aid for medical treatments or expenses.
• Government Assistance Programs: Programs such as Medicaid, Medicare, and the Children’s Health Insurance Program provide various but limited coverage or subsidies for income eligibility-based individuals and families.
• Health Savings Accounts and Flexible Spending Accounts: These tax-advantage accounts allow pre-tax funds to be used for qualified medical expenses.
• Medical Crowdfunding: Individuals can raise funds online from the public to help cover medical costs. 

Overall, the trends emerging for 2026 include market segment splitting, reducing or limiting access to care via commercial insurance, and minimizing plan risk (cost) to balance anticipated double-digit premium increases on employers. Government programs have also seen large increases in similar annual costs post-pandemic.

Advocates, advocacy groups, and some individual employers have the following recommendations for navigating these trends:

• Contract directly with high-value providers: Corporatization along with merger and acquisitions of health care service practices has hindered contracting efforts. Direct contracted care has delivered marginal results in geographic case studies due to the lack of large-scale use and real-world limitations in contracting with all providers in a given employer network. 
• Design smarter plans that steer toward quality and value: Sustainable, long-term support for primary care that delivers on quality and value has remained elusive in the market due to various real-world ebb and flow market factors, including benefit plan strategy.
• Support strong primary care to keep people healthy and costs predictable: In the rare cases where public or private employers have regained control, it hasn’t been luck—employers have been deliberate in how they purchase care. However, employer plans remain mostly status quo since the COVID pandemic.

Public Sector

Preliminary data shows double-digit increases in health plan renewals are impacting employers across the country. Public sector plans are getting hit especially hard. In New Jersey, for example, state and local government workers have faced rate hikes of more than 20% year over year—115% in the last five 
years alone—with little relief in sight.^11,12

Massachusetts has also seen proposed rate hikes averaging greater than 13% for businesses with fewer than 50 employees. That renewal rate increase is double the 3.6% benchmark for health care costs set by the Massachusetts Health Policy Commission.¹³

For ACA marketplace plans, analyses of initial rate filings for 2026 indicate a median proposed premium increase of 18%, according to a report by Peterson-KFF Health System Tracker.¹⁴ Another analysis of preliminary filings from July 18 found a median premium increase of 15%.¹⁵ This means that many individuals and families who obtain health insurance through the ACA marketplace will likely experience double-digit premium increases for 2026 coverage. This would be the largest increase since 2018. 

Private Sector

In today’s challenging economic environment, private sector employers are facing double-digit percentage increases in their commercial health care insurance premiums upon renewal. This trend—as seen with ACA plans—is driven by several interconnected factors, creating a complex and ever-changing landscape for both employers and employees. These factors include the following: 

• Rising health care costs: The underlying cost of health care, including increased prices for services such as hospitalizations, physician care, and prescription drugs, remains a primary driver of premium increases. Insurers commonly cite an 8% increase in underlying health care costs for 2026, similar to the previous year.
• Expiration of enhanced premium tax credits: The enhanced premium tax credits for ACA are set to expire at the end of 2025. This is projected to increase OOP premium payments for many individuals by over 75% on average, according to a Peterson-KFF Health System Tracker analysis.¹⁴ Insurers anticipate this will lead healthier individuals to drop coverage, negatively impacting the risk pool and potentially driving up premiums further.
• Tariffs: The potential impact of tariffs on the cost of pharmaceuticals, medical equipment, and supplies is another factor driving up premiums. Some insurers are building in modest upward adjustments to their trend assumptions, estimating a 3% increase in premiums due to tariffs.
• Inflation and labor costs: Health care worker shortages and increased wage demands are driving up expenses for providers, which are ultimately reflected in premiums.
• Demand for specialty medications: The growing demand and utilization of high-priced drugs, including GLP-1s like Ozempic and Wegovy and other specialty medications, are significantly impacting premium calculations.
• Policy uncertainty: Uncertainty around federal policy changes and the implementation of new regulations have forced insurers to make assumptions when developing their rates, potentially leading to higher risk margins and larger rate increases.¹⁶ 

For the fourth year, health plan actuaries surveyed annually by PwC said they anticipate medical cost trends for the group and individual markets to remain high. Based on these results, PwC is projecting next year’s cost trend to remain at 8.5% for the group market and 7.5% for the individual market. The pharmacy cost trend also saw an increase of 2.5 points higher than the medical trend, further highlighting the importance of managing pharmaceutical care.¹⁷ 

PwC recommends that health plans put more emphasis on cost of care programs to bring the medical cost trend to a sustainable level, at least for the short term. For long-term solutions there needs to be “reallocation of healthcare spending to create a patient-centric ecosystem anchored by care that’s preventive, personalized, and predictive with flexible sites of are built around the patient.”¹⁷

According to a Mercer’s Survey on Health and Benefit Strategies for 2026, about 45% of employers are planning to shift more health care expenses to workers.^18,19 For instance, they plan to institute higher deductibles or annual OOP maximums. 

However, the survey found that employers plan to increase certain benefits, including childcare, elder care services, and resources to support women’s reproductive health. More are also offering onsite Employee Assistance Program counseling services and providing more sessions. 

The Mercer survey also found that US employers are planning the following strategies for 2026:

• Tackle high-cost growth by focusing on cost management. Some employers are choosing alternative medical plans that steer employees to higher-value providers, while some will stick to traditional plans.
• Consider affordability when weighing health benefit cost management strategies. 
• Support diverse workforce needs with inclusive benefits.

The transition from health plan year 2024 to 2025, and looking ahead to 2026 and beyond, reveals positive and negative trends that will continue to affect all health care stakeholders. Anticipating such mixed trends, which are sometimes counterintuitive to previous efforts or messaging, employers are making adjustments to protect their business interests. Centers for Medicare & Medicaid Services is also trying to manage short-term spending in their growing population of Medicare insurance products. These efforts are likely to negatively impact commercial insured populations due primarily to cost shifting 
by providers and therapy manufacturers shifting pricing structures worldwide. 

Clinical only guidelines or pathways utilized in managed care programs will be impacted by these numerous plan design changes or cost management programs. Non-clinical applications of clinical pathways can be expected to grow and change more quickly throughout 2026 to 2030. AI is likely to spur the expansion of uses in clinically effective programs that incorporate traditional pathways toward optimizing member patient care outcomes, including financial considerations.

Findings in US commercial plans show the following cost trends:

• Significant cost increases are occurring. Analysts and consulting firms are projecting an annual rise in employer health plan costs in the range of 6% to 8%. This trend is a continuation of several years of above-average cost growth.²⁰
• Rising per-employee costs are creating further financial pressures in an uncertain US economy. The average cost per employee for a comprehensive health benefits package is expected to reach an estimated $15 000 per year, up from the $13 000-$14 000 range in 2024.²¹
• ACA affordability adjustments are impacting employers and employees. The affordability benchmark for employer-sponsored coverage under the ACA is increasing to 9.96% of an employee’s household income for the 2026 plan year. This is a notable rise from 9.02% in 2025, giving employers a higher ceiling for employee cost-sharing contributions while still meeting ACA requirements. ²²

As a result, employers in the commercial insurance market are expected to do the following:

1. Optimize plan design: Adjust health plan structures to encourage more cost-effective care without sacrificing current quality in care.
2. Leverage technology and data: Utilize available tools for both cost management and employee well-being.
3. Be proactive with wellness and pharmacy management: Invest in preventative care and improved pharmacy strategies to yield measurable 1-year short-term and 3-to-5-year long-term savings into 2030.
4. Consider alternative funding and risk-pooling: Explore innovative collaboration or pooling arrangements with other employers as part of stronger risk mitigation planning into 2030.
5. Promote employee engagement and education: Facilitate member understanding and engagement for the longer term in utilization of covered benefits for benefits strategy success. 

Whatever the final plan rates may ultimately cost any employer, there remains a shared friction in health care that has been mitigated and features ever-bigger middlemen negatively impacting employers, providers, and patients. 

Employers, as plan sponsors or purchasers, have little to no visibility into health care spending, which has been allowed to happen in self-funded plans, resulting in ever-rising health care cost trends. Manufacturer portfolios of new or novel therapies have ramped up the pricing schemes while disabling lower cost options, increasing the pressure on private or public sector plans and programs. Similar challenges to effectively, yet holistically, manage utilization patterns with guidelines or pathways have faced member patient pushback due to the lack of personalized care made available.

Providers deal with ever-growing delays, denials, and rising financial receivables for delivering health care services or products. Corporatization of provider care has seemed to only enhance battles over contracting as plans faced increased care cost claims from 2024 into 2025. 

Patients struggle to find or cannot afford care (combined premium and OOP costs) and face confusing rules from third-party medical or pharmacy administrators. Regrettably, 2026 will look a lot like 2024 and 2025, but with enhanced member patient risk for OOP costs in their plan. Calls for change, transformation, and innovation now reign across the marketplace. How and when such a change will happen remains unknown. 

1. Fisher Philips. Workplace law update: 10 essential items on your August 2025 to-do list. August 1, 2025. Accessed August 30, 2025. https://www.fisherphillips.com/en/news-insights/workplace-law-update-10-essential-items-august-2025.html
2. Foley & Lardner LLP. Health care & life sciences top trends for 2025. 2025. Accessed September 5, 2025. https://www.foley.com/health-care-life-science-trends-2025 
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