A Pivotal Year for Benefits Plan

PUBLISHED APRIL 2026

Surveys project that health-care costs in the United States are likely to increase by 6.5 percent to, in many cases, as much as over 10 percent in 2026. Regardless of the exact figure, employers can expect costs to continue to skyrocket, and they will absorb much of the costs.

Americans’ heightened interest in and spending on weight loss drugs is a major cost driver. While GLP-1 drugs are traditionally used to treat diabetes, they are now in demand for weight loss; prescriptions have tripled just since 2020. A RAND report revealed that 12 percent of Americans have used GLP-1 medications for weight loss, and 14 percent are interested in them. 

Already, more than half a dozen GLP-1 drugs are available, with more expected to hit the market soon. Additional drugs could further drive up health-plan costs, especially with the most recent development of the first oral GLP-1 pill, making the drug more accessible and convenient. With pharmaceutical companies recognizing the success of semaglutide and tirzepatide, more than 100 obesity-fighting drugs are currently in clinical development.

Many employers are concerned when it comes to covering these drugs, as they require a long-term commitment to be effective. GLP-1 drugs, on average, cost around $1,000 per individual each month. This employee benefits trend impacts the workplace as employees ask their employer to cover weight-loss drugs.

Other Specialty Drugs

The specialty drug market continues to expand rapidly, driven by a surge in approvals by the FDA and a robust pipeline of innovative therapies. These high-cost, high-impact treatments are reshaping the pharmaceutical industry. Experts estimate that nearly 80 percent of all FDA approvals in 2025 fall into the specialty category, reflecting a shift toward more targeted, complex therapies for chronic and rare conditions. This momentum is expected to continue throughout 2026.

This rapid growth is being fueled by more plan participants using these key specialty drugs:

♣ Biologics and biosimilars. Biologics currently dominate the specialty market, offering targeted treatment for autoimmune diseases, cancers, etc. However, as they lose exclusivity, biosimilars are gaining traction as cost-effective alternatives. With 29 new biosimilars approved in the past two years, the trend is expected to continue; predictions indicate that at least 10 new biosimilars will be approved annually over the next five years. This dual trend of popularity and lapsing exclusivity is expected to reshape employer strategies and formulary decisions. A biosimilar can only be marketed after the corresponding biologic loses its 12-year exclusivity rights following approval.

♣ Cell and gene therapies. These cutting-edge treatments achieved record approvals in 2025, with groundbreaking treatments such as CAR-T therapy that is revolutionizing cancer treatments. While these innovations offer transformative outcomes for conditions such as blood cancers and rare genetic disorders, they face challenges in costs, logistics, and manufacturing. The industry is now shifting toward purpose-built automation and analytical technologies that streamline CGT production. This shift aims to reduce costs, improve scalability, and accelerate patient market access.

♣ Expansion of fertility treatments. Many employees are turning to fertility treatments while trying to navigate their paths to parenthood. According to the U.S. Centers for Disease Control and Prevention, roughly 9 percent of men and 11 percent of women of reproductive age have experienced fertility problems. These treatments often include medications, which are sometimes combined with surgical procedures.

With some states already requiring insurance companies to cover infertility diagnosis and treatments, new federal initiatives aim to make in vitro fertilization more affordable.
The new guidance provides that employers may offer the following:

♣ Fertility benefits can be offered as an independent, non-coordinated excepted benefit if applicable conditions are met. Individuals enrolled in such coverage may also contribute to an HSA.

♣ An excepted benefit health reimbursement arrangement may reimburse an employee’s out-of-pocket costs with respect to fertility benefits, as long as the HRA meets the applicable regulatory requirements, such as offering a traditional ACA-compliant health plan.

♣ Benefits for coaching and navigator services can be offered to help employees and their dependents understand fertility options under an employee assistance program that qualifies as a limited excepted benefit. To qualify as a limited excepted benefit, the EAP cannot be coordinated with benefits under another group health plan, no employee premiums or contributions can be required as a condition of participation, and there must be no cost sharing under the EAP.

In sum, this is going to be a pivotal year for employee benefits all around,  with higher costs, drug therapies, and new legislative initiatives. Employers should proactively prepare for these changes to not only better position themselves in a competitive market but also to show their commitment to supporting their workforce through innovative benefits.