Alight Inc. Reports Increasing Enrollment in Alternate Medical Plans Amid Rising Healthcare Costs

One of the most concerning insights from Alight's analysis is the marked increase in medical and dental expenses. For 2026, the median medical cost for single employees is projected to rise by 9.8%, following a 5% increase in 2025. Families will experience even more drastic changes, with median costs set to jump by 16.8%, representing a nearly 12-percentage point increase from the previous year. This trend indicates that employers are increasingly passing on healthcare costs to employees, raising concerns about affordability and accessibility.

The analysis also sheds light on the widening gap in medical enrollment based on income levels. The data reveals that lower-income employees, particularly those earning between $20,000 to $39,999 annually, have seen a decline in enrollment rates, from 50% in 2025 to 47% in 2026. In stark contrast, higher-income employees earning $80,000 or more have maintained a stable enrollment rate of 86% over the same period. Interestingly, age does not appear to influence medical enrollment rates, highlighting the income disparity as a critical factor.

In response to rising costs, many employees are turning to alternate medical plans. Alight’s findings indicate that enrollment in these plans has doubled across most salary ranges compared to 2025, with the most significant growth observed among lower-income workers. Alternate plans, which often incorporate unique design features such as copays instead of high deductibles, reference-based pricing, and value-based care, offer employees a greater degree of predictability regarding out-of-pocket expenses. This trend suggests that employees are actively seeking alternatives that may better suit their financial realities.

The use of AI tools has seen a remarkable uptick during the enrollment process, with over 8.5 million interactions recorded on Alight’s platform from October to December 2025. This figure is a substantial increase from approximately three million interactions in the same period the previous year. The data reflects a changing mindset among employees, as evidenced by Alight’s 2025 Employee Mindset Study, which found that 43% of workers now trust AI to assist in making informed benefits decisions. This growing comfort with AI indicates a shift towards technology-driven solutions in managing employee benefits.

Alight’s analysis highlights a significant preference for digital enrollment methods, with traditional call-based enrollment remaining in low single digits. The company reports that digital enrollments constitute a high percentage of the total mix, underscoring the importance of a tech-savvy approach to employee benefits. Alight emphasizes the value of combining high-tech solutions with a human touch, ensuring that employees receive personalized guidance when needed.

Karen Frost, Vice President of Health Strategy at Alight, encapsulated the essence of this year’s findings, noting, “Open enrollment trends this year show incredible opportunity for employers to implement benefits strategies that help serve employees of all income levels.” The insights from Alight’s annual enrollment analysis underscore the critical need for employers to adapt their benefits offerings in response to evolving employee needs and the economic realities of healthcare.

As the landscape of employee benefits continues to evolve amidst rising healthcare costs, organizations must leverage AI and innovative benefit designs to enhance employee wellbeing and engagement. For ongoing updates and the full results of the open enrollment analysis, interested parties are encouraged to visit Alight's official website.