Navigating the surge in health care costs: Why supplemental health benefits are more important than ever

Employers and brokers are facing a pivotal moment as costs for employer-sponsored health plans are expected to increase nearly 10 percent in 2026 –  the steepest rise in over a decade.¹ The pressure to balance affordability, access and employee satisfaction has never been greater.

What’s fueling the increases

 A perfect storm of inflation, specialty drugs and increased utilization are driving these increases.²

• Hospital and provider costs are rising due to inflation, labor shortages and supply chain disruptions
• Specialty drugs like GLP-1s for weight loss and diabetes are consuming up to 10 percent of total pharmacy spend
• Delayed care during the pandemic is resurging in the form of elective procedures and chronic condition management

While employers can’t control these factors, they can take control in other ways, including offering more voluntary benefits to help employees meet their health needs and offset rising medical expenses.

Why supplemental health benefits matter

Supplemental health benefits are an effective way to help offset costs and have become more than just a “nice to have.” These benefits are essential tools for financial protection and access, especially as costs are shifted to employees.

• Supplemental health benefits offer customizable coverage that helps meet diverse workforce needs
• They  provide financial safeguards for high-cost events like hospitalization, critical illness and fertility treatments
• Offering these benefits helps improve retention and satisfaction, especially when benefits align with life-stage priorities³

Strategically implementing supplemental health benefits can help balance rising deductibles and copays, while offering employees peace of mind and choice.

Fertility and reproductive health benefits have traction as core components

As we highlighted in our July issue of Snapshot, fertility support is a key differentiator in workplace benefits. With improved technology and reduced stigma around treatments, more employees are seeking help, and they’re looking to their employers for support. The numbers tell the story:

• Nearly 40 percent of employees are negatively impacted financially by the pressures of family building⁴
• One in six people, at some stage in their lives, are affected by infertility⁵
• 73 percent of millennials are more likely to stay with an employer based on family-building benefits⁴
• 75 percent of Gen Z are more likely to choose an employer based on family-building benefits⁴

Benefit solutions for  fertility and reproductive health

We know employers and brokers are under pressure, and we’re committed to helping you navigate this evolving landscape. We’ve enhanced our critical illness insurance to include coverage for select fertility and reproductive health conditions. It now includes benefits covering:

• Premature menopause
• Egg or sperm harvesting
• Disorders of the reproductive organs
• Abnormalities of the uterus, fallopian tubes or ovaries
• Viral or bacterial reproductive infections

Reproductive health is a vital part of life and well-being, and employees are looking for benefits to reflect that reality and lessen their financial burdens.