Employers Brace for Health Plan Overhaul Amid Rising Costs: WTW Survey Insights

A recent survey conducted by WTW (NASDAQ: WTW), a prominent global advisory and solutions company, reveals a concerning trend in the U.S. healthcare landscape. As healthcare costs reach their highest levels in over two decades, employers are gearing up for significant changes in their health plans. The findings of the 2025 Best Practices in Healthcare Survey indicate that U.S. employers expect their healthcare expenses to rise by 9.1% in 2026, a jump from 8.1% in 2025 and 7.0% in 2024.

The survey highlights a pivotal shift in employer attitudes toward healthcare management. Nearly one in three employers (33%) are contemplating major alterations to their healthcare offerings within the next three years. The primary catalysts for these changes are identified as:

These factors have led employers to prioritize their strategies around medical costs, pharmacy expenses, and employee affordability, while also emphasizing employee well-being and healthcare delivery.

In response to these escalating costs, employers are increasingly adopting a multifaceted approach. The survey notes that nearly 59% of employers are looking to implement broader cost-saving actions in the next three years, up from 46% in the past three years. Key strategies include:

Tim Stawicki, Chief Actuary for Health & Benefits at WTW, commented on this shift, stating, “Fewer employers are absorbing rising costs because it’s becoming too expensive. Instead, employers are looking to bold disruptive changes that control costs and improve health to create a more sustainable path forward.”

Employers are also recognizing the need to expand clinical programs to tackle the increasing burden of chronic conditions. Areas of focus include:

Employers are taking proactive steps to manage unnecessary medical expenses. The survey indicates that 46% of companies are currently evaluating vendor performance, and 36% have solicited bids for their medical plans. Additionally, 33% of employers have conducted medical claims audits to improve efficiency, with 44% planning to follow suit.

Alternative plan designs are gaining popularity, with 41% of employers currently utilizing them. These designs emphasize attributes like cost transparency, enhanced navigation, and advanced primary care. The survey suggests that nearly half (46%) of employers are considering implementing these alternative approaches within the next two years.

Frustration over the performance of Pharmacy Benefits Managers (PBMs) is evident, with 75% of employers indicating they have or will take their PBM out to bid. More than half (58%) have recently audited their pharmacy benefits, reflecting a strong push for increased governance and transparency in this area.

Artificial Intelligence is poised to transform healthcare benefits management. While only 21% of employers are currently using AI extensively, a staggering 80% believe it will fundamentally reshape how healthcare benefits are managed and delivered in the next three years. Employers see the most potential for AI in improving navigation, personalized decision support, and overall employee experience.

Courtney Stubblefield, Managing Director for Health & Benefits at WTW, emphasizes the need for revolutionary approaches in addressing healthcare costs. She stated, “Employers must take a more revolutionary approach to address both immediate cost pressures and long-term cost trends.”

As U.S. employers navigate the complexities of rising healthcare costs, the findings from the WTW survey underscore a significant shift toward innovative strategies and transformative changes in health plans. With a clear focus on employee well-being and cost management, the future of healthcare benefits is set to evolve dramatically in the coming years.