Health care costs in the United States continue to rise, putting pressure on both employers and employees. Organizations that offer benefits are working hard to balance affordability, transparency, and quality—especially as costs are projected to jump again in 2026.
According to a recent Business Group on Health (BGH) survey, employers expect a 9% increase in health care costs next year—the steepest annual rise in more than a decade. Even after plan design changes and cost-control measures, costs are still expected to grow by more than 7%.
So, what’s driving this trend and how can employers help their teams understand what’s behind it?
Why Health Care Costs Are Rising
Several factors are contributing to the projected increases, including:
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Rising pharmacy costs, especially GLP-1 medications for diabetes and weight management.
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Increased spending on cancer care and other high-cost treatments.
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Higher rates of chronic and complex conditions.
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Growing demand for mental health care.
Employers are responding by exploring cost-management strategies like preventive care initiatives, vendor negotiations, and alternative funding models (such as level-funded plans).
How to Talk About It With Employees
Cost-sharing is becoming more common, but communication matters just as much as plan design. Employees are more likely to stay engaged and satisfied when they understand why changes are happening and how to make the most of their benefits.
Here are a few ways to keep communication clear and empathetic:
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Keep messaging simple. Avoid jargon—explain what’s changing and why in plain terms.
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Educate on cost drivers. Share resources that help employees use care more wisely, like cost-comparison tools or telehealth options.
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Be proactive. Communicate changes before they take effect, and be transparent about the reasons behind them.
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Show your efforts. Let employees know what you’re doing to manage rising costs—like negotiating with providers or investing in wellness programs.
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Put it in context. Use relatable examples and emphasize that rising costs are a nationwide issue, not unique to your organization.
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Meet employees where they are. Use a mix of channels—email, meetings, digital platforms—to reach your full workforce.
The Bottom Line
Health care costs aren’t slowing down anytime soon, but clear communication and thoughtful planning can make a real difference. By helping employees understand the why behind rising costs, employers can build trust and empower their teams to make informed health care decisions.
If you’d like help communicating benefit changes or exploring cost-management strategies, reach out. At Van Wyk, we’re here to help you navigate every situation with confidence.