Rising healthcare costs are nothing new for employers. What is new is how many different pressures are showing up at the same time.
For years, cost management across the benefits offering followed a more or less predictable pattern. Healthcare trends increased gradually. Insurance markets cycled. Workforce costs shifted in ways that could be modeled and planned for over time.
Things have changed.
In the 2026 NFP U.S. Benefits Trend Report, data confirms that employers are now experiencing cost pressures coming from multiple directions at once. Healthcare, pharmacy, wages, insurance, and workforce expectations are all evolving simultaneously. What was once a series of manageable trends has become far more complex and less predictable.
“It’s not just that costs are going up,” said Cam Kennedy, Managing Director at NFP. “It’s that they’re going up across the board and moving in ways that can’t be easily predicted or managed.”
Connected cost drivers
Many of these cost drivers are interconnected. Decisions made in one area often influence outcomes in another. Changes to health plan design can impact employee behavior. Workforce decisions can affect benefit utilization. Insurance strategies can influence broader financial risk. What used to be managed in silos is now increasingly connected.
“We’re seeing clients move away from treating these as separate issues or bucketing them in separate silos,” said Kennedy. “Costs don’t show up that way, so managing them that way doesn’t really work anymore.”
This complexity has only made it more difficult to manage these increases. The historical practice of focusing on plan design changes and contribution strategies is becoming increasingly difficult. Employees are already struggling to make ends meet with inflation that is hitting them hard across nearly every category of personal spend. Even small changes in healthcare exposure can have noticeable impacts on employee disruption and turnover.
The need for data-driven strategies
Employers need to move beyond traditional approaches, placing greater emphasis on cost management strategies that reduce the total cost of care, or at least makes increases more manageable. This includes pharmacy management, funding strategies, and targeted solutions addressing high-cost areas such as diabetes, cancer, and mental health.
“Across the board, the most consistent thing is the level of attention this is getting,” said Beth Robertson, leader for health and benefits at NFP. “Employers are asking more questions, looking at more data and trying to understand what’s actually driving their costs instead of just reacting to them.”
And that data dive is so important.
Rather than relying on a single lever, organizations are investing in data and analytics to better understand cost drivers across their programs. Others are aligning benefits, risk and workforce strategies to reduce unintended consequences between decisions. Many are focusing on communication, recognizing that employee behavior plays a meaningful role in how costs develop over time.
Evolving workforce expectations
Workforce expectations around benefits, flexibility and overall experience continue to evolve. While efforts to control costs must be weighed against the need to attract and retain talent, in many cases, employers are not choosing between cost and experience. Instead, they are trying to manage both at the same time.
That’s easier said than done.
“Employers are being asked to do more with the same or fewer resources,” said Kennedy. “The challenge is finding ways to manage costs without creating new issues somewhere else.”
The organizations that are making progress containing costs are not necessarily the ones spending less. They are the ones approaching cost more deliberately. They’re asking better questions, connecting decisions across functions, and staying closer to the underlying drivers.
Costs will continue to rise. For now, this is not likely to change. What must change is how effectively organizations understand and manage them.
Download the 2026 NFP U.S. Benefits Trend Report to get more insights on changes in organizational cost management.
