2026 Midyear Employee Benefits Market Outlook

Topic-by-topic cost, compliance and plan design trends for brokers guiding employers through 2027 planning.

Health care costs are defining the narrative for employers in 2026, and the pressure is building rather than easing. PwC’s annual medical trend report projects that the commercial healthcare cost trend will rise to 9% in 2027, the highest figure in 17 years, and Zywave’s 2026 Broker Services Survey found that healthcare cost management ranked as the No. 1 benefits challenge for employers for the third straight year. Midyear is the last practical window for employers to recalibrate plan design, vendor partnerships and cost-containment efforts before open enrollment narrows their options.

At the midyear point of 2026, several forces are reshaping how benefits are designed, priced and administered. For example:

• Prescription drug spending is outpacing overall medical trend, with GLP-1 drugs now driving approximately 20.3% of prescription spending at large self-funded plans and nearly 8 in 10 employers reporting that GLP-1s are increasing their company’s healthcare costs
• ERISA fiduciary litigation is moving beyond retirement plans into group health plans and voluntary benefits, and courts are increasingly willing to let these claims move forward, as seen when a federal judge denied the motion to dismiss in Barbich v. Northwestern University
• AI adoption is accelerating on both sides of the claim, with roughly 40% of HR leaders now using AI for benefits administration while nearly 70% of surveyed health plans named AI-powered documentation tools a top-three cost driver for 2027

This report compiles midyear developments across eight areas shaping the second half of the year: rising healthcare costs and 2027 predictions, ERISA fiduciary litigation, AI in benefits, fertility benefits, GLP-1 trends, direct-to-employer drug platforms, TrumpRx and the extra payroll period facing biweekly employers in 2026. Each section outlines what is driving the trend, what it means for plan sponsors and the specific steps employers should take before open enrollment.

As always, employers who work with trusted benefits professionals to stay on top of evolving market trends and adjust their plan design and cost-containment strategies accordingly will set themselves up for success.

Download the 2026 Midyear Employee Benefits Market Outlook today.