current_report_2026-1

ISSUE 2026-1

THOUGHT LEADERSHIP FOR POWERFUL BUSINESS SOLUTIONS

INSURANCE REPORT 2026

MESSAGE FROM OUR PUBLISHERS

In the first edition of The Current Insurance Report 2026 our experts examine the topics that matter to our clients. This issue discusses benefits strategies that can steer employers through uncertain times and how benefits literacy is key to maximizing your benefits investment. How shifts in healthcare are affecting employers and the value-driven health plans shaping employer-sponsored care. Updates to benefits compliance continue with PBM reform and changes to family leave at the state level. You will find links to this and other educational resources inside. At Corporate Synergies we ensure that you have all the information you require to make the right decisions for your organization. We also know your time may be limited which is why we provide our guidance in a simple format for easy consumption. We hope you find this report instructive as our team of industry leaders continue to provide thoughtful commentary on the issues employers face in the constantly changing healthcare insurance market.

Mike Lisa, President & CEO, Chief Growth Officer

Andrew Bloom, President & CEO, Chief Operating Officer

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TABLE OF CONTENTS TABLE OF CONTENTS

STEADYING THE SHIP: FLEXIBLE BENEFITS STRATEGIES FOR NONPROFITS IN UNCERTAIN TIMES Nonprofits need creative solutions for steadying the ship during this volatile era for funding their initiatives. _________________4 MAXIMIZING YOUR BENEFITS INVESTMENT: WHY HEALTH INSURANCE LITERACY IS THE MISSING LINK Literacy is still the missing link in effective benefits utilization. Workers still don’t understand key health insurance terms. _____6 POOLING DEMYSTIFIED: HOW POOLING LEVELS HELP MANAGE RISK IN GROUP BENEFITS Understanding how pooling levels can help manage risk, gives employers flexibility during renewal season. _ ________________8 HOW HEALTHCARE SHIFTS WILL AFFECT EMPLOYER COSTS Volatility in the insurance landscape is fueling healthcare shifts that employers should consider carefully. _________________10 HOW VALUE-DRIVEN HEALTH PLANS ARE RESHAPING EMPLOYER-SPONSORED CARE Employers should consider how value-driven health plans can control costs while providing high quality care to staff. ________13 WHY METABOLIC HEALTH SHOULD BE EVERY EMPLOYER’S NEXT BENEFITS PRIORITY Employers who track staff metabolic health can address issues before they become systemic problems. _ _________________16 ANALYSIS PRESIDENT SIGNS SIGNIFICANT PBM REFORM INTO LAW WITH CAA 2026 Employers should review current PBM and PBM Consulting Agreements. _______________________________________________18 IRS RELEASES UPDATED FSA AND OTHER PLAN LIMITS FOR 2026 Employers should ensure that their plans do not allow employees to make pre-tax contributions in excess of the 2026 plan limits. ________________________________________________________________________________________19 NEW YORK PAID FAMILY LEAVE RATE CHANGE SET FOR 2026 Plan sponsors should communicate the upcoming rate change to employees and the deduction amount for premium contributions is accurate. ______________________________________________________________________________ 20 ILLINOIS SET TO REQUIRE MEDICAL COVERAGE FOR PARENTS AND NEW LEAVE REQUIREMENTS IN 2026 Plan sponsors should discuss these new laws and regulations with their trusted advisors and plan services providers. _ ________ 21 ADDITIONAL COMPLIANCE RESOURCES Find expert analysis on complex compliance developments !_ ________________________________________________________ 22 COMPLIANCE THE TRUMP EFFECT: NAVIGATING EMPLOYEE BENEFITS IN 2026 Learn how to stay compliant and competitive with the President’s employee benefits regulations. _________________________ 23 BENEFITS BEAUTIFULLY REIMAGINED: NAVIGATING THE OBBBA’S IMPACT ON BENEFITS Discover the key benefits, compliance challenges and strategic opportunities of the OBBBA ._____________________________ 24 FMLA & ABSENCE MANAGEMENT: NAVIGATING LAWS AND RISK Learn the nuances of absence management and how to avoid potential risks. _ ________________________________________ 25 GLP-1s AT A CROSSROADS: STEERING ACCESS, OUTCOMES & COST Find out how GLP-1s are going to change the face of employee benefits .______________________________________________ 26 ADA ESSENTIALS IN THE WORKPLACE: RESPONSIBILITIES, RIGHTS & RISKS Learn how to navigate accommodations, avoid common pitfalls, and more. _ __________________________________________ 27 ESSENTIAL STRATEGIES FOR HR PROFESSIONALS Discover our key recommendations for critical HR challenges. _______________________________________________________ 28 HEALTHDISCOVERY.ORG Share this free wellness resource with your staff. _ _______________________________________________________________ 29 EDUCATION

Mike Lisa Co-Publisher

Andrew Bloom Co-Publisher

Brian Feeley Executive Editor

Abba Belgrave Editor

Solange Senye Graphic Designer Keiren Dunfee Art Director

Dina A. Beck Co-Editor

Solange Senye Graphic Designer

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BY RACHEL WALKUSKI, DIRECTOR, ACCOUNT MANAGEMENT

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STEADYING THE SHIP: FLEXIBLE BENEFITS STRATEGIES FOR NONPROFITS IN UNCERTAIN TIMES Nonprofits need creative solutions for steadying the ship during this volatile era for funding their initiatives. Nonprofit leaders know all too well that uncertainty is the only certainty these days. When funding streams wobble, whether because of looming Medicaid cuts or unpredictable grant renewals, maintaining stable, competitive benefits can feel like building on shifting sand. But this type of turbulent environment is exactly where savvy benefits strategies can shine, transforming risk into resilience. Rather than succumbing to budgetary pressure, forward-thinking organizations are crafting nimble, cost-effective solutions that keep teams engaged, energized and ready to carry the mission forward, no matter what tomorrow brings. Embracing Agility in a Shifting Landscape Nonprofit organizations typically negotiate multi-year benefit contracts to lock in predictable coverage rates. But when the financial calculus for 2025 bears little resemblance to what’s projected for 2026, locking in long-term commitments can feel like a leap of faith. The uncertainty around potential funding cuts , grant reallocations and fluctuating philanthropic support makes it impossible to assume that current budgets will carry forward. In this climate, a benefits strategy built on flexibility proves invaluable. Flexible plan designs and modular ancillary offerings allow nonprofits to avoid costly penalties for early termination while securing essential coverage for their teams.

Flexible plan designs and modular ancillary offerings allow nonprofits to secure essential coverage for staff.

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Financial wellness workshops, 403(b) maximization seminars and personalized one-on-one savings guidance empower employees to build resilience on and off the job. When employees see that their company is committed to their overall well-being, morale improves, productivity follows and the organization’s mission gains renewed momentum. Partnering for Stability, No Matter What Comes Next It’s impossible to predict which funding streams will remain intact or what new mandates might surface overnight. In such times, the difference between a disengaged workforce and one that feels supported often hinges on benefits that address both head and heart. Nonprofit leaders who embrace innovation, educate relentlessly and champion holistic well-being will attract and safeguard talent. And for advisors who guide them through the unknown, the reward is more than a successful plan; it’s the knowledge that every creative solution helps strengthen the organizations working to make our communities stronger, healthier and more resilient.

How No-Cost Benefits Can Alleviate Stress When budgets tighten, adding new employer-paid benefits becomes unrealistic. But employees still need support for stress management, financial well-being and preventive care, which is where voluntary and ancillary benefits shine: They allow staff to opt in to supplemental coverage at little to no cost to the employer. Meanwhile, educating employees about existing plan resources—leveraging wellness dollars for preventive screenings or tapping into employee assistance programs for financial counseling—can unlock tangible value without straining organizational coffers. As nonprofit employees become savvier, providing clear guidance on maximizing benefits builds trust and drives engagement, reinforcing the message that their employer truly cares. Innovative Cost Containment through Performance Networks Cost containment is often synonymous with limiting provider access, but performance networks take a more nuanced approach by directing employees to high-quality providers based on outcomes. Instead of steering staff toward the lowest-cost option, these networks prioritize doctors and facilities with lower complication rates and higher patient satisfaction. For geographically concentrated nonprofit teams, narrow performance networks can yield significant savings while preserving choice. Employees still see their preferred provider but are incentivized to select top performers first. Over time, this model reduces total medical spend, minimizes costly readmissions and delivers better health outcomes. And these benefits ripple back into organizational stability.

Building Financial Resilience with Tailored Reimbursement Accounts A high-deductible medical plan may lower premiums, but it can also expose employees to unpredictable out of-pocket expenses. To bridge that gap, organizations can structure health reimbursement arrangements (HRAs) or medical expense reimbursement plans that kick in behind the primary medical policy. By allocating fixed dollars to cover deductibles and co-payments, nonprofits can offer rich benefits without increasing their overall spend. An HRA funded at a modest level can transform a high-deductible plan into a more affordable proposition, shielding employees from sticker shock and reducing claims leakage due to delayed care. Aligning Benefits with Mission and Culture Thoughtful benefits design must mirror a nonprofit organization’s culture of care and recognition. Beyond financial and medical support, many nonprofits incorporate stress-prevention perks like mindfulness programs or digital mental health subscriptions for at-work decompression.

Thoughtful benefits design must mirror a nonprofit organization’s culture of care and recognition.

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BY RACHEL WALKUSKI, DIRECTOR, ACCOUNT MANAGEMENT

AS SEEN IN

MAXIMIZING YOUR BENEFITS INVESTMENT: WHY HEALTH INSURANCE LITERACY IS THE MISSING LINK Literacy is still the missing link in effective benefits utilization. Workers still don’t understand key health insurance terms. Employers invest millions each year in health benefits, but how many employees truly understand the full range of what’s available to them? With more than half of insured adults reporting that they find at least one aspect of how their health insurance works difficult to understand, the gap between benefit design and benefit use remains a costly blind spot for employers. When employees don’t understand their coverage, they underutilize preventive care, overutilize emergency services, mismanage chronic conditions and miss opportunities to leverage voluntary benefits. The ripple effects include inflated claims costs, lost productivity and diminished ROI for employers. The Literacy Gap: A Hidden Cost Too often, employees view their benefits in isolation rather than as part of a holistic package. Many people spend time analyzing medical plan options but overlook voluntary offerings, such as hospital indemnity, legal services or Employee Assistance P rograms (EAPs). When these pieces are overlooked, employers lose value on the investments they’ve made to provide a comprehensive package. Consider the employee who declines a hospital indemnity plan until they face an unexpected hospital stay with a high deductible. Or the employee who never realizes their legal plan covers lease reviews and struggles later without support. These aren’t fringe scenarios. They represent a broader misconception: Benefits exist in silos rather than as a coordinated system. For employers, that misconception has tangible costs. Employees who are unfamiliar with how to use their benefits effectively may overspend on healthcare. For example, they might choose a $3,000 hospital MRI instead of a $350 freestanding option. Those choices directly impact overall claims. Ultimately, they influence future premium renewals.

Literacy efforts must be adaptable and culturally competent. Use plain language to connect with employees.

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To make benefits education meaningful, employers need to create touchpoints throughout the year rather than cramming everything into a two-week window. Off-cycle education—through summer lunch-and learns, mid-year all-staff sessions or short reminders about underutilized programs—gives employees the chance to absorb information without the stress of a looming deadline. The most effective employers plan these touchpoints proactively. As soon as a renewal is finalized, they map out the education sessions that will take place throughout the year, including the topics to be covered and the experts involved. This structured approach makes benefits education a year-round priority rather than a rushed annual event. Pairing Digital Tools with Personal Guidance Technology has given employees more decision support tools than ever, including plan comparison apps, cost estimators and provider finders. But digital tools alone aren’t enough to drive real engagement. People learn in different ways—some employees absorb information best in one-on-one conversations, others through visuals and others by exploring resources independently. Without complementary human support, even the best digital tools risk going unused. The solution isn’t choosing between digital or human support exclusively; it’s combining them. Employers who layer multiple approaches—charts for visual learners, live Q&A sessions for interactive learners and on-demand PDFs for independent learners—see significantly higher engagement. Meeting employees where they are is what turns information into action.

Employee Experience and Culture Matter The ROI of benefits isn’t just financial; it’s also human. Employees who feel confident navigating their health plans are healthier, more engaged and less stressed. When employees don’t understand their benefits, mistakes accumulate: out-of-pocket costs that can’t be reimbursed, misused services or preventive care that remains untapped. Generational and cultural differences also shape engagement. A 26-year-old enrolling for the first time has vastly different needs—and a different baseline understanding—than a 60-year-old preparing for retirement. For employees who are not native English speakers, terms like “deductible” or “coinsurance” may not resonate in the same way, making it harder for them to connect those concepts to real-world decisions. To be effective, literacy efforts must be adaptable and culturally competent. Using plain language, relatable scenarios and translated or tailored resources ensures all employees can see how benefits apply to their own lives. Everyone understands the experience of standing at a doctor’s office, unsure of what you owe—bringing benefits education down to that level of real-life relevance makes the information more accessible to every employee. Rethinking Benefits Education If benefits education is so critical, why is it still treated as an open enrollment exercise? In reality, it often gets crowded out as HR teams juggle recruiting, compliance, culture and countless administrative demands. Cramming everything into a single enrollment period is ineffective. Employees are already overwhelmed during that time, and important benefits can easily be overlooked.

Measuring Success How can employers know if their literacy efforts are working? The answer lies in your utilization data. Look for indicators like higher preventive care rates, fewer non-emergency ER visits and stronger voluntary benefit adoption. Employee feedback that reflects confidence in navigating benefits is also important. When employees consistently make choices that balance quality and cost, it’s proof that the education strategy is delivering results. Employers are spending more than ever on benefits, and without health insurance literacy, these investments fail to deliver their full potential. Year-round, culturally competent education, enhanced by both digital tools and personal guidance, empowers employees to understand and use their benefits. The real ROI is in employees who are healthier, less stressed and more confident in using their benefits. When employees truly understand their benefits, they recognize their full value as a key part of total compensation. By closing the literacy gap, employers strengthen their investment while also empowering their workforce to make informed choices, leading to better health and financial outcomes for everyone.

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BY MATTHEW STRAIN, SENIOR VICE PRESIDENT

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POOLING DEMYSTIFIED: HOW POOLING LEVELS HELP MANAGE RISK IN GROUP BENEFITS Understanding how pooling levels can help manage risk, gives employers flexibility during renewal season. When employers prepare for their group benefits renewal, most focus on obvious cost drivers, such as claims experience, demographics or plan design. A less visible factor, pooling, can have a significant influence on renewal outcomes. Understanding how pooling levels help manage risk in group benefits can assist benefit leaders as they navigate claim volatility, negotiate renewals and protect their budgets from healthcare cost increases. What is Pooling? Pooling is a built-in safeguard in fully insured programs that protects a group from high-cost claims. For employers, it softens the impact of high-cost medical or pharmacy claims that could otherwise destabilize a plan. Pooling also protects carriers by spreading the risk of the unknown across their book of business through pooling premiums. Recognizing this dual purpose is essential to understanding how pooling affects renewals. In fully insured plans, pooling functions like stop-loss protection. Once an individual’s claims exceed a certain threshold, known as the pooling level, the insurer removes the excess from the group’s renewal calculation. These excess costs are covered by pooled funds, supported by an additional charge—the pooling premium. Pooling establishes a financial ceiling for how much one catastrophic claim can affect a renewal. Without it, a single cancer diagnosis or expensive specialty prescription drugs could easily drive double-digit premium increases at your next renewal. Understanding Pooling Levels Pooling levels are dollar thresholds set by carriers. For example, if a group’s level is $100,000, only the first $100,000 counts toward the group’s rate increase. Amounts in excess are excluded from the renewal calculation.

Catastrophic claims are unpredictable, and pooling helps insurers shield themselves against those unknowns.

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Several factors influence pooling levels: Q Group size: Larger groups generally have higher pooling levels; smaller groups usually have lower thresholds. Q Carrier practices: Insurers set ranges that can vary by region. Q Premium volume: Carriers need to collect a certain amount of pooled premium to justify higher thresholds, which often limits how high a client’s pooling level can go. Employers sometimes have the option to increase their pooling level, which reduces fixed costs (lower pooling premiums) but transfers more risk back to the group. In other words, higher pooling levels equal lower fixed charges but potentially higher claim liability. In this way, pooling levels can help manage risk. The Role of Pooling Premiums Pooling premiums are the fees carriers charge to provide this protection. Though they may appear minor compared to overall medical premiums, they play a significant role in renewal math. Pooling protects both employers and carriers. Catastrophic claims are unpredictable, and pooling helps insurers shield themselves against those unknowns. By pricing that risk in advance, carriers maintain financial stability while offering protection to groups. Once a claim becomes ongoing and predictable, such as a member requiring $130,000 annually in specialty drugs, carriers no longer treat it as an unknown. Instead, they may increase the pooling premium at the next renewal to reflect that new certainty. Pooling charges evolve alongside the group’s risk profile, ensuring both parties share in the risk.

What Claims Typically Hit the Pooling Level? Traditionally, high-cost hospital stays or rare diagnoses were the primary drivers of pooled costs. However, pharmacy claims are increasingly the primary cause. Specialty medications for conditions such as multiple sclerosis or rheumatoid arthritis can exceed six figures annually, even without hospital admissions. With the rapid advancement of specialty drugs and more expensive medications, it will become increasingly common for pharmacy claims—not just traditional medical claims—to exceed pooling levels. Large claim reports often reveal pharmacy costs as the main driver of pooled claims, a significant shift for both clients and carriers, one that is expected to continue rising in the coming years. How Pooling Affects Renewals Pooling shields groups from immediate financial devastation, but it doesn’t eliminate the impact of high cost claims on renewals. Claims above the pooling level are removed from renewal formulas to soften increases, but ongoing claims can still influence pricing. Once a claim is no longer a surprise, carriers adjust pooling premiums upward to account for it. Formulas matter as well. Carriers rely on underwriting models filed with regulators. If a group consistently experiences more high-cost claims than expected, those models drive higher charges at renewal. In short, pooling is a shared risk-management tool: It creates stability for employers and ensures sustainability for carriers.

Managing Pooling in Renewal Strategy For benefits leaders, the key isn’t just knowing that pooling exists; it’s understanding how to manage it strategically: Q Track large claims proactively: Monitor claimants approaching the pooling threshold to anticipate renewal impacts. Q Evaluate pooling levels: In some cases, increasing the level may lower fixed costs and improve long term predictability. Q Understand carrier behavior: Each insurer has its own thresholds and approach to pooling; knowing how they respond to ongoing claims helps in negotiations. Q Plan for the inevitable: Pooling levels and premiums rise over time due to inflation and increasing drug spending , so factor this into multi-year budgeting. Pooling as a Tool for Stability Pooling is a critical mechanism that shapes how carriers assess risk and how employers experience renewals. By understanding pooling levels, evaluating pooling premiums and planning for the impact of high-cost claims, benefits leaders can approach renewals from a position of strength. Pooling is not just protection for the employer—it also ensures stability for the carrier. Recognizing this dual purpose allows HR and finance leaders to negotiate from a clearer understanding of the mechanics at play. Pooling should be part of every renewal conversation, both as a cost driver and a cost protector, to achieve stability and predictability.

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BY MICHAEL RACHESKY, REGIONAL VICE PRESIDENT

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HOW HEALTHCARE SHIFTS WILL AFFECT EMPLOYER COSTS

Volatility in the insurance landscape is fueling healthcare shifts that employers should consider carefully. The employer-sponsored healthcare market is rapidly shifting, and businesses are feeling it first. Policy change, post-pandemic hospital economics, pharmaceutical expansion and shifting consumer behavior are all contributing to a volatile cost environment. These healthcare shifts will impact employers both large and small. Understanding these forces and acting early will be essential to protecting budgets and maintaining plan value. A Post-COVID Financial Hangover Today’s cost landscape cannot be separated from the pandemic’s lingering effects on health systems. During COVID-19, hospitals postponed elective procedures—their most reliable revenue source—and faced an unprecedented workforce crisis. Burnout and staff shortages forced providers to offer costly retention bonuses, raise wages and rely heavily on temporary contract labor, such as travel nurses. These short-term fixes drove labor expenses sharply higher, compounding elevated supply costs. Insurers and public payers infused billions into health systems to stabilize them. Those temporary lifelines now factor into renewed rate negotiations as providers seek to recover lost margins, resulting in tighter carrier underwriting and

Employers cannot control macro trends, but they can take actions to limit their impact.

rising renewal costs for employers. The Maryland Model in Transition

Maryland provides a clear example of how policy shifts can reshape employer health costs. For decades, the state’s Health Services Cost Review Commission (HSCRC) has overseen an all-payer model setting uniform hospital rates for Medicare, Medicaid and commercial insurers. As a result, overall hospital spending has remained below national averages.

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That structure is evolving. In 2026, Maryland will implement the federal States Advancing All-Payer Health Equity Approaches and Development (AHEAD) model . While HSCRC will retain some rate-setting functions, its authority will narrow as the state transitions toward broader population health and total cost-of-care targets set by the federal government. Because employer plans nationally pay roughly two to three times Medicare rates for comparable services—while Maryland’s all-payer model has long kept commercial reimbursement near parity—any shift toward national pricing levels would represent a dramatic increase in employer costs. Even modest adjustments could create significant upward pressure on premiums. Multi-state employers may also feel indirect effects as carriers reprice Maryland network costs across broader risk pools. Although the AHEAD model takes effect on January 1, 2026, the transition of HSCRC responsibilities will continue through 2028, giving employers a rare opportunity to plan ahead. Early market projections indicate potential premium increases of around 20% for Maryland-based employees once these changes take full effect, reinforcing the importance of proactive, strategic preparation.

National Headwinds that Amplify the Challenge The Maryland transition is a microcosm of what’s happening nationwide. Several factors are compounding the upward pressure on employer health costs: Q Rising pharmaceutical and specialty drug spend. G LP-1 medications, now widely prescribed for obesity and cardiovascular risk reduction, are driving significant pharmacy cost increases. Broader coverage could raise premiums by 5-14% , depending on program design and utilization. Employers are applying new coverage criteria and behavioral support programs to manage access without limiting appropriate care. Q Care avoidance and deferred care. Even before the pandemic, delayed preventive screenings and inconsistent chronic condition management drove avoidable, high-cost claims. As members return to care later and sicker, more advanced diagnoses and higher-cost interventions are increasing overall claim severity.

Q Provider consolidation and the risk of deteriorating care. Ongoing mergers among hospitals and physician groups, often backed by private equity, are reshaping the delivery landscape. Larger systems can standardize processes and technology, but consolidation and investor-driven ownership can prioritize financial returns, raising negotiated rates and, in some cases, reduced staffing levels that affect quality and outcomes . Q Policy and subsidy uncertainty. If Congress does not extend the enhanced Affordable Care Act premium tax credits (eAPTCs) set to expire at the end of this year, individuals receiving subsidies on the marketplace will face higher premiums. Many may forgo coverage or move to a spouse’s employer plan instead. For employers that share costs for spouses and dependents, this shift could increase total benefits spending and add new budget uncertainty.

Even modest adjustments toward national pricing levels can create significant upward pressure on premiums.

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What Employers Can—and Should—Do Now Employers cannot control macro trends, but they can take specific actions to limit the impact on their health plans. 1. Engage in scenario planning Work with advisors to model renewals under multiple scenarios. Identify where employees seek care and how much spending is concentrated in high-cost regions—especially states facing policy transitions like Maryland. Include 2026 budget discussions with your CFO to prepare for potential policy shifts, such as the expiration of marketplace subsidies or enhanced tax credits. 2. Deploy smarter healthcare navigation Guidance that points employees to high-value physicians, centers of excellence and evidence-based care reduces wasteful utilization. In a market where consolidation limits choice and transparency, navigation programs help employees identify quality care options. When paired with well-structured plan designs, these programs can lower total spending while improving the employee experience—often resulting in richer benefits and better outcomes. 3. Rebaseline aggressively Before larger escalations set in, pursue near-term savings. Every dollar saved today lowers tomorrow’s baseline. Potential levers include: Q Pharmacy benefit redesign that negotiates stronger PBM terms, tightens formularies and considers specialty carve-outs. Q Early investments in long-term employee health, such as GLP-1 coverage for weight loss, which may increase short-term costs but can lower medical trend over time. Q Preventive care incentives that refresh annual wellness exams and lab work to identify issues early and avoid costly interventions. Q Data-driven provider performance programs that guide members to high-quality, cost-efficient physicians. 4. Evaluate self-funding and reference-based pricing strategies As regulatory rigidity loosens, self-funding and reference-based pricing become more viable. For the first time, reference based pricing may represent a practical option for Maryland-based employers, offering an alternative to traditional contracts. Both approaches provide deeper claims transparency, greater contracting flexibility and stronger control over cost variation. 5. Communicate transparently When rates rise, clear messaging matters. Position increases as a response to market pressures, not discretionary cuts. Explain the steps being taken to protect value and encourage the use of high-value care. A straightforward, well-framed narrative can reduce backlash and drive cost-conscious behaviors. While some policy reforms may eventually improve sustainability, current trends point to higher costs and greater volatility. Employers cannot control regulation or drug pricing, but they can control preparedness. Early planning, awareness of policy shifts and proactive cost management will sustain benefits and strengthen long-term stability.

Clear messaging matters. When plan design changes occur, position increases as a response to market pressures, not employer budget cuts.

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BY HARRISON NEWMAN, VP, EMPLOYEE BENEFITS CONSULTANT MICHAEL RACHESKY, REGIONAL VICE PRESIDENT

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HOW VALUE-DRIVEN HEALTH PLANS ARE RESHAPING EMPLOYER-SPONSORED CARE Employers should consider how value-driven health plans can control costs while providing high quality care to staff. As healthcare premiums continue their relentless climb , employers face a familiar and frustrating cycle: enhance benefits to attract and retain talent, or scale them back to control costs. This tradeoff often results in higher out-of pocket expenses for employees, delayed care and growing dissatisfaction with the system. Harrison Newman and Michael Rachesky explain how value-driven health plans can help employers. It’s a cycle that’s been repeating for decades. We chase the deepest network discounts, tweak plan designs, switch carriers, shift costs and repackage the same offerings, but the results remain largely unchanged. As the saying goes, “The definition of insanity is doing the same thing over and over again and expecting different results.” In many ways, that has been the story of employer-sponsored health insurance. Now, a shift is underway. Forward-thinking companies are beginning to view benefits through a new lens—not focused solely on network accessibility, size or discounts, but on total cost of care. This broader view considers the full scope of care-related expenses, including follow-up visits, complications and long-term outcomes. Just as HDHPs ushered in a new era of consumerism by encouraging employees to weigh cost in their decisions, today’s value-driven health plans build on that foundation—offering smarter choices through transparency, incentives and guided navigation, without sacrificing access or quality. Terabytes of network data, quality metrics and financial incentives are unlocking unprecedented transparency, making it easier than ever for members to find top-performing providers. Early adopters are already seeing the benefits: stabilized costs, improved outcomes and stronger employee engagement.

Value-driven plans rely

on data and analytics to elevate provider quality and guide smarter choices.

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least resistance. Instead of broad cost shifting, they apply targeted incentives, such as: Q Access preservation: Zero or minimal copays for efficient providers ensure there is no financial burden for following medical recommendations. Q Value promotion: Members naturally gravitate toward providers with stronger track records in outcomes and efficiency. Q Cost stewardship: Employers and employees realize savings by reducing unnecessary procedures, complications and high cost admissions. By making high-quality care the most accessible and affordable option, these plans shift health coverage from a passive expense into a strategic lever for value, delivering richer benefits, better outcomes and more controlled costs without restricting member choice. How Networks Are Optimized Behind the Scenes Value-driven plans rely on a foundation of data and analytics to elevate provider quality and guide smarter choices. Carriers and partners use clinical and claims data to identify providers who consistently deliver high-quality, efficient care. These insights

So what exactly are value-driven health plans, and how are they reshaping the future of employer-sponsored care? How Do Value-Driven Health Plans Work? Value-driven health plans are designed to improve outcomes and reduce costs. At their core, they rely on data-driven tools and analytics to identify high performing providers and guide member decisions. These plans rethink the traditional provider experience by ranking physicians using quality metrics—such as outcomes, patient satisfaction and efficiency—and aligning those rankings with cost-sharing incentives. Instead of narrowing networks, these plans empower consumers with clear data and meaningful rewards for choosing top-performing providers. Members engage with user-friendly portals that surface high-performing providers based on quality ratings, cost data and real-time availability. Personalized guidance helps users navigate preauthorization, risk assessments and follow-up care, ensuring clinical appropriateness and financial clarity. On the employer side, quarterly reports offer a clear view into utilization, cost trends and member satisfaction, enabling ongoing refinements that drive meaningful results. Leveraging carrier network data doesn’t just influence member decisions; it also shifts provider behavior. As more employers adopt such plan designs, providers are increasingly incentivized to improve quality metrics, avoid unnecessary procedures and prioritize evidence based care to remain accessible at the most favorable copay. Reframing the Cost Richness Equation Traditional cost containment strategies can create barriers to care and frustrate employees. A data-driven design breaks this mold by preserving rich benefits while also making smarter care choices the path of

fuel digital tools and member dashboards that surface top-performing options based on each person’s needs—balancing quality, convenience and cost. Some solutions also incorporate predictive analytics to support early intervention for at-risk members. This behind-the-scenes optimization helps members access the right care, at the right time, from the right provider—without requiring them to sift through confusing directories or fine print. Impact and Adoption While cost sensitive organizations may lead the way in adopting value-driven plans, aligning incentives and outcomes makes strategic sense for all employers, regardless of sector. Everyone benefits when members are guided toward higher quality care. Such benefits include:

Q Budget stability: Medical trend growth slows as incentives and transparent pricing encourage smarter care choices.

These plans rethink the traditional provider experience by ranking physicians using quality metrics and aligning those rankings with cost-sharing incentives.

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Q Improved clinical pathways: Directing members to top performing specialists and facilities improves care journeys, reduces avoidable complications, speeds access to critical diagnostics and enhances overall patient outcomes. Q Enhanced member engagement: When no or low copays pair with seamless digital guidance, satisfaction and trust rise. As a result, members are more likely to follow recommended care paths. The Employer Advantage Value-driven plans give organizations the opportunity to rethink their benefits playbook. By shifting incentives to proven, high value care, employers curb year-over-year healthcare cost increases and reset their cost baseline—so employers get more value from the same payroll percentage, with a lower per-member spend. They also move beyond metrics like network discount rates, which often obscure the true cost and value of care. While traditional plan designs often rely on network discount rates as a measure of savings, these discounts can be misleading. Without real pricing transparency, employees may struggle to find providers who offer the deepest discounts—and even when they do, lower unit costs don’t always translate into better value. Low-cost care that leads to complications, repeat visits or extended recovery times can cost both the member and the health plan more in the long run. Consider institutions like Johns Hopkins: While their unit costs may be higher, their quality and efficiency often lead to better outcomes, fewer complications and lower total cost of care. Value-driven plans account for this by focusing on total cost, outcomes and provider performance—not just sticker price. They reward those who follow evidence based practices, avoid unnecessary procedures and deliver consistent, high quality care. Because these plans typically operate through a single, well-designed structure, HR teams spend less time managing variations and more time driving strategy. The result is a model that balances rich benefits with smarter care As rating methodologies are refined and competition among high performing providers intensifies, value-driven plans will further democratize access to superior care. AI and analytics will customize recommendations at the individual level, factoring in social determinants and longitudinal outcomes to guide each member’s unique journey. Under these shifting sands, employer sponsored coverage moves from a static cost bucket to a strategic driver for population health, financial sustainability and talent engagement. For employers ready to move beyond reactive cost cutting toward proactive value creation, the time to act is now. decisions—a win for both budgets and the workforce. Looking Ahead: The Future of Value Driven Benefits

Personalized guidance helps users navigate

preauthorization, risk assessments and follow-up care, ensuring clinical appropriateness and financial clarity.

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BY BRIAN REILLY, EMPLOYEE BENEFITS CONSULTANT

AS SEEN IN

WHY METABOLIC HEALTH SHOULD BE EVERY EMPLOYER’S NEXT BENEFITS PRIORITY Employers who track staff metabolic health can address issues before they become systemic problems. Employers spend enormous amounts each year on chronic condition management. Yet behind most of those costs lies a single, connected issue: poor metabolic health. Six in 10 Americans live with at least one chronic disease , and four in 10 manage two or more. Together, they account for nearly 90% of the nation’s $4.5 trillion annual healthcare spend. Metabolic health, the body’s ability to efficiently convert food into energy, is central. When that system falters, it drives a cascade of problems: elevated blood sugar, hypertension, fatigue, depression and more. Its effects ripple through the workplace, increasing time away, lowering performance and driving costs higher. Despite its impact, metabolic health rarely appears on the HR dashboard. That oversight is costing employers more than they realize. The Data Lag Problem Most benefits strategies are built around claims and utilization data, information that tells employers what has already gone wrong. By the time a condition shows up in the data, it’s too late to prevent it. That backward-looking model creates a perpetual cycle of reaction, not prevention. To truly manage costs and improve well-being, employers need metrics that look ahead. Tracking metabolic risk indicators such as blood pressure, body mass index (BMI) or glucose levels allows benefits teams to intervene before issues escalate. When employers invest in prevention, they protect both their people and their bottom line.

When employees understand their numbers, they’re more likely to take ownership of their health.

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better health outcomes, especially when provided in a palatable, human way. Incentives can also be a powerful motivator. Once employees are equipped with the knowledge and support of how to take better control of their health, they can begin to take meaningful, lasting steps. The Role of GLP‑1s GLP-1s offer promise for individuals managing type 2 diabetes and obesity, but without proper support, the impact of the drugs is temporary. For employers who offer GLP-1 coverage, it’s important that they also provide resources, like nutrition counseling and coaching, that teach sustainable habits for long-term success and metabolic health. Small Steps, Big Impact Improving population health can seem daunting to employers, but incremental change adds up. Here are a few foundational steps to start with: Q Integrate on-site screenings: Provide easy, accessible biometric checks at health fairs, open enrollment and other company events, using carrier wellness credits to keep costs low.

From Treatment to Prevention Improving metabolic health doesn’t require a massive program overhaul. But it does require a shift in mindset from managing illness to empowering healthier lifestyles. The most effective employer strategies combine three elements: early detection, education and engagement. Early Detection Encouraging wellness is one thing, but actively promoting it is another. One of the simplest and most effective ways to do that is by offering in-office biometric screenings. These quick checks—typically including blood pressure, cholesterol, blood sugar and BMI—can identify potential health risks before they develop into costly conditions. Employers can easily incorporate screenings into annual health fairs or open enrollment meetings, often using carrier wellness credits to cover the cost. When employees understand their numbers, they’re more likely to take ownership of their health, and that awareness lays the foundation for long-term well-being. Education and Engagement Consistency is essential to employee engagement. It’s not only about meeting employees where they are but doing so frequently and in a format that encourages peak engagement. While some may feel comfortable engaging digitally or attending wellness workshops, most employees benefit from regular, low-stakes reminders—whether that’s via email, DM or sticking around after a meeting. This consistency keeps health top of mind and will reinforce engagement that leads to smarter choices and better outcomes. Often, it’s not about whether employees are taking the right steps or not; it’s that they don’t know what the right steps are. Education is fundamental to driving

Q Use incentives to spark engagement: Offer simple rewards, such as gift cards or wellness points, for completing health risk assessments, joining coaching programs or participating in preventive care. Q Communicate consistently: Build awareness through regular, low-touch reminders via email, DM or team meetings. Q Pair GLP-1 benefits with support: If offering GLP-1 coverage, reinforce it with nutrition counseling, behavioral health resources and coaching to drive sustainable change. Q Track engagement and outcomes: Measure participation and progress, and use these insights to refine future program design and investment Employers need a new perspective on metabolic health, one that views it as a metric of success. With better metabolic health comes stronger teams, lower costs and healthier organizations.

Education is fundamental to driving better health outcomes, especially when provided in a palatable, human way.

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PRESIDENT SIGNS SIGNIFICANT PBM REFORM INTO LAW WITH CAA 2026

On February 3, 2026, President Trump signed into law the Consolidated Appropriations Act , 2026 (“CAA 26”), which will implement significant reforms to PBM compensation structures, as well as broad and sweeping transparency requirements for PBMs and other plan service providers. CAA 26 is effective for plan years beginning on or after 30 months from Feb. 3, 2026, which is August 3, 2028 (or January 1, 2029 for calendar year plans). Additionally, just days earlier, on January 29, 2026, the U.S. Department of Labor (DOL) issued a proposed regulation (“Proposed Rule”) aimed at requiring greater price transparency in group health plan contracts with PBMs and other plan vendors providing “pharmacy benefit management services,” including PBM consultants and affiliated brokers and consultants. If the Proposed Rule is finalized as written, it would significantly expand ERISA fee disclosure requirements for these plan service providers. The Proposed Rule, if finalized, would apply to plan years beginning on or after July 1, 2026. What Should Employers and Plan Sponsors Do Next? Although no immediate actions are required and many provisions of the new law remain dependent on future rulemaking, preparatory steps can be taken at this time. Existing PBM and PBM consulting agreements should be reviewed to ensure alignment with anticipated requirements as significant restructuring may be required. In addition, plan sponsors should confirm that fiduciary processes for reviewing and assessing plan vendor compensation are established, documented, and aligned with plan documents and related policies.

ACTION REQUIRED: Q Employers should review current PBM and PBM Consulting Agreements. Q Employers and plan sponsors should also review their Plan’s process for plan vendor compensation assessment. Q Large, self-insured employers should submit comments on the Proposed Rule to clarify potential compliance gaps.

Read our February 11, 2026 Alert 

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IRS RELEASES UPDATED FSA AND OTHER PLAN LIMITS FOR 2026

On October 9, 2025, the IRS issued Revenue Procedure 2025-32 , which announces new inflation adjustments for health FSAs, commuter benefits and other benefit plans. What Should Employers and Plan Sponsors Do Next? Employers and plan sponsors should ensure that their plans do not allow employees to make pre-tax contributions in excess of these amounts for 2026, and they should communicate the 2026 limits for these and the other benefit plans to their employees as part of the open enrollment process.

ACTION REQUIRED: Q Employers should ensure that their plans do not allow employees to make pre-tax contributions in excess of the 2026 plan limits. Q Employers should also communicate the 2026 limits for these and other benefit plans to their employees during open enrollment.

Read our October 17, 2025 Alert 

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