--- title: "Rising Cost of Group Healthcare in 2026: Key Drivers" description: Discover why group health insurance premium increases in 2026 are projected to climb. Learn what’s driving rising group healthcare costs and how to respond. image: https://blog.axcethr.com/hubfs/group-health-insurance-premium-increase-2026-_1200-x-628-px_%20(1).webp --- - [Client Portal](https://www.axcethr.com/client-services/) - [Employee Login](https://www.axcethr.com/client-services/) [![AxcetHR Solutions Blog](https://blog.axcethr.com/hubfs/AxcetHR2021%20Blog/axcethr_logo_white%20(1).png)](https://www.axcethr.com/) - [About Us](https://www.axcethr.com/about-us/) - [Corporate Philantropy](https://www.axcethr.com/about-us/corporate-philanthropy/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [Values and Culture](https://www.axcethr.com/about-us/values-and-culture/) - [Kansas PEO](https://www.axcethr.com/about-us/kansas-peo/) - [Missouri PEO](https://www.axcethr.com/about-us/missouri-peo/) - [Careers](https://axcethrsolutions.prismhr-hire.com/) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [Why Choose Axcet?](https://www.axcethr.com/why-axcet/) - 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[Employee Safety & Risk Management](https://blog.axcethr.com/topic/employee-safety-risk-management) - [Employee Benefits](https://blog.axcethr.com/topic/employee-benefits) - [All about COVID-19 in the Workplace](https://blog.axcethr.com/topic/covid19) - [Kansas & Missouri HR News](https://blog.axcethr.com/topic/kansas-and-missouri-hr-news) - [Kansas City Interest News](https://blog.axcethr.com/topic/kansas-city-interest-news) - [PEO/HRO](https://blog.axcethr.com/topic/peo) - Choose Topic: - [Human Resources](https://blog.axcethr.com/topic/human-resources) - Payroll Administrations - [Employee Safety & Risk Management](https://blog.axcethr.com/topic/employee-safety-risk-management) - [Employee Benefits](https://blog.axcethr.com/topic/employee-benefits) - [PEO](https://blog.axcethr.com/topic/peo) Rising Cost of Group Healthcare in 2026: Key Drivers 4:50 # Rising Group Healthcare Costs: What Employers Face in 2026 By [Katie Herrera, SPHR](https://blog.axcethr.com/author/katie-herrera) on [Sep 09, 2025](https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers) 4 min read [0 comment(s)](https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers#comments-listing) Share this: - - - - [whatsapp://send?text=https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers](whatsapp://send?text=https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers) - [mailto:?subject=Rising%20Cost%20of%20Group%20Healthcare%20in%202026:%20Key%20Drivers&body=https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers](mailto:?subject=Rising%20Cost%20of%20Group%20Healthcare%20in%202026:%20Key%20Drivers&body=https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers) ![group-health-insurance-premium-increase-2026 (1)](https://blog.axcethr.com/hs-fs/hubfs/group-health-insurance-premium-increase-2026%20(1).webp?width=1200&height=800&name=group-health-insurance-premium-increase-2026%20(1).webp) The nationwide trend of rising group healthcare costs shows no signs of slowing, and small businesses should brace for another year of steep premium increases in 2026. Experts warn that employers could see double-digit jumps — anywhere from 10% to 20% — as catastrophic claims, costly specialty drugs, including GLP-1, and lingering post-pandemic health issues continue to drive expenses higher. For many organizations, these increases are pushing benefits budgets to the breaking point and forcing difficult choices about plan design, employee cost-sharing and whether to continue offering coverage at all.   ## Why Are Healthcare Costs Rising?  Numerous factors, including inflation, higher prices for specialty drugs and increased demand for care, all contribute to the steady climb in medical insurance premium increases. More advanced and expensive technology in diagnostics and treatment also drives small business group health insurance premium increases, as do the long-term effects of delayed care during the pandemic that are spiking more complex, costly claims as untreated conditions resurface.  Other factors include a continuing shortage of healthcare workers, increasing disease prevalence, particularly among younger workers, and the higher treatment and medication needs of an aging workforce.  [![how to prepare your small business for annual benefits renewal](https://no-cache.hubspot.com/cta/default/2652187/b02e3a36-f8a0-44b5-94ef-285172387d2a.png)](https://cta-redirect.hubspot.com/cta/redirect/2652187/b02e3a36-f8a0-44b5-94ef-285172387d2a) ## GLP-1 Drugs and Rising Employer Health Insurance Costs A major factor accelerating premium increases is the surge in prescriptions for GLP-1 drugs like Ozempic, Mounjaro, Wegovy and Zepbound. While developed for diabetes, much of today’s demand comes from employees seeking them for weight loss. [CFO recently reported](https://www.cfo.com/news/companies-now-cover-glp-1s-for-weight-loss-rising-healthcare-costs-cfo-human-resources-/749759/) that more employers are expanding coverage for weight-loss use — and the costs are significant. Employees on GLP-1 therapy can generate nearly **double the medical and pharmacy expenses of non-users**, often reaching tens of thousands of dollars per person each year. As these costs are spread across the entire group plan, premiums and cost-sharing rise for all employees, not just those taking the drugs. This growing reliance on GLP-1s highlights why many employers are bracing for sharper cost increases in 2026 and beyond. Some organizations are considering prior authorization requirements, coverage limits or other controls to help keep spending in check, but each approach carries trade-offs in employee satisfaction and retention. RELATED: [Benefits Renewal Process Checklist - Steps to Take Before Open Enrollment Starts >>](https://blog.axcethr.com/benefits-renewal-process-checklist-steps-to-take-before-open-enrollment-starts) ## The Impact on Small Businesses   For small businesses, which face higher per-employee costs and, on their own, limited negotiating power with insurers, the rising cost of group healthcare is forcing tough decisions about plan design, cost-sharing and, in some cases, even whether to continue offering coverage at all.  A small business medical insurance premium increase of even a few percentage points can have a significant impact on operating budgets. At the same time, traditional cost-containment strategies – like increasing deductibles, raising required employee contributions and narrowing provider networks – can jeopardize employee satisfaction and retention if taken too far. [![PEO Health Insurance & Employee Benefits](https://no-cache.hubspot.com/cta/default/2652187/interactive-184585319203.png)](https://blog.axcethr.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKgCfIMAvrxwlhNPTG33AuKF1x14Q5IJLbO2pmjlA1%2F6TtAr7qlcAsNwhN9VoV6PxQw8lYzfPo1sSyLllz%2FO%2BbOqIOxWAXivOBWidKFHc95jzS%2B0fpddnPJ34yTZzuB50vtdNtaQH7OUywShwJuIO1KaTMtIYFctR1genYtxuTyrSDAVEUBDIEZqWPvYg5y6HhMY%2FcpqW3oo%2B%2FGmclqzkohxSYa%2BzhYAyJf4%2FzEDup%2BSWnqC9UHnTnVnqXkyMiL0U%2FRdDPACAaF5hIWrgpaFxZXykycS4n7icQFAnc%2FifeNMg%3D%3D&webInteractiveContentId=184585319203&portalId=2652187) ## Small Business Strategies to Manage Rising Group Healthcare Costs  Understanding the forces behind premium increases helps business owners navigate the challenges of rising group healthcare costs. The following strategies are worth considering as your small business works to manage expenses while continuing to offer benefits that aid in retaining talented and productive workers:  ### Shop the Market for Better Rates Working with an experienced broker or your PEO can help uncover more affordable plan options. By shopping the market and exploring different carriers, employers may find plans that better fit their budget. Considering structures like high-deductible health plans paired with Health Savings Accounts can also reduce premiums and spread costs more effectively.  RELATED: [Small Business Health Insurance Broker vs PEO >>](https://blog.axcethr.com/small-business-health-insurance-broker) ### Implement Wellness Programs  Investing in preventive health initiatives like fitness challenges, gym subsidies and mental health support can improve employee well-being, reduce future claims and demonstrate a commitment to workforce health.  ### Adjust Employee Contributions Carefully While increasing employee cost-sharing can help manage premium costs to your company, the decision to ask employees to pay more should be approached thoughtfully to avoid damaging morale or retention. Transparent communication and gradual implementation are key.  ### Offer Health Reimbursement Arrangements (HRAs) HRAs, including Qualified Small Employer HRAs (QSEHRAs) and Individual Coverage HRAs (ICHRAs), allow employers to reimburse employees tax-free for individual insurance premiums and medical expenses. This approach offers flexibility, cost control and greater personalization compared to traditional group plans, making it an appealing alternative.  Partnering with experts at a [certified professional employer organization](https://blog.axcethr.com/cpeo-vs-peo) (CPEO) can help small businesses design benefits strategies that balance cost and employee satisfaction.   As a CPEO with long-standing expertise in [health benefits consulting](https://www.axcethr.com/services/employee-benefits/employee-benefits-details/),[Axcet HR Solutions](https://www.axcethr.com/why-axcet/) can leverage its buying power to give small businesses access to competitive pricing that otherwise would be out of reach. Axcet can also handle[benefits administration](https://www.axcethr.com/services/employee-benefits/employee-benefits-administration-and-compliance/), compliance and employee communication, relieving small business owners of those burdens and freeing them to focus on growth.  RELATED: [Avoid Making the Nine Most Common Employee Benefits Mistakes >>](https://blog.axcethr.com/avoid-making-the-7-most-common-employee-benefits-mistakes) ## Looking Ahead  In today’s market, small businesses that take a proactive approach to benefits planning are better positioned to manage the rising cost of group healthcare. As a trusted [certified PEO](https://www.axcethr.com/why-axcet/certified-peo/), Axcet provides the expertise, scale and tools that help smaller organizations ensure that quality employee healthcare remains a sustainable part of their business plan. [![See if a PEO makes sense for your business](https://no-cache.hubspot.com/cta/default/2652187/18caba7b-fa27-458e-b41c-5af2422700be.png)](https://cta-redirect.hubspot.com/cta/redirect/2652187/18caba7b-fa27-458e-b41c-5af2422700be) [![Katie Herrera, SPHR](https://blog.axcethr.com/hs-fs/hubfs/_DSC5632-Edit.jpg?width=80&height=80&name=_DSC5632-Edit.jpg)](https://blog.axcethr.com/author/katie-herrera) Written by #### [Katie Herrera, SPHR](https://blog.axcethr.com/author/katie-herrera) Katie Herrera, SPHR is a Human Resources Consultant at Axcet HR Solutions, where she partners with small to mid-sized businesses to simplify HR, strengthen compliance, and support positive employee experiences. With a strong foundation in both strategic and day-to-day HR operations, Katie brings a practical, solutions-oriented approach to helping organizations navigate the complexities of managing their workforce. Katie earned her bachelor's degree in Business Administration with a focus in Human Resources from Grand View University and holds the Senior Professional in Human Resources (SPHR) certification through HRCI—demonstrating her advanced knowledge and commitment to the HR profession. Before joining Axcet, Katie served as an HR Partner at Netsmart and a Human Resources Generalist at Charlotte's Web, where she gained experience supporting diverse teams, advising leadership, and addressing a wide range of employee relations and compliance challenges. Her background enables her to understand the real-world pressures business owners and HR leaders face—and provide guidance that is both strategic and actionable. Katie is especially passionate about building strong relationships, solving problems collaboratively, and helping businesses create workplaces where employees can thrive. Through her writing, she shares practical insights, best practices, and timely updates to help employers stay informed and confident in their HR decisions. Read more [View all posts →](https://blog.axcethr.com/author/katie-herrera) ### Get HR Updates ### Table of Contents ### Related Resources - [services Small Business Health Insurance](https://www.axcethr.com/services/employee-benefits/) - [article small business health insurance costs](https://blog.axcethr.com/small-business-health-insurance-how-to-manage-costs) #### [What the PEO Experience Is Really Like for Small Business Owners ![The Axcet HR Solutions team shares what the PEO experience is like for small business owners and their employees when they partner with a professional employer organization.](https://blog.axcethr.com/hubfs/Employee-Satisfaction-PEO-_1200-x-628-px_%20(1).webp)](https://blog.axcethr.com/elevating-employee-satisfaction-the-peo-advantage) #### [![zero tolerance policy](https://blog.axcethr.com/hubfs/zero-tolerance-policy-sexual-harassment-_1200-x-628-px_%20(1).webp) Zero Tolerance Policy: Stopping Sexual Harassment in the Workplace](https://blog.axcethr.com/defining-zero-tolerance-to-curb-sexual-harassment) ## Let us know what you think... ![AxcetHR Blog](https://blog.axcethr.com/hubfs/AxcetHR2021%20Blog/axcethr_logo_white%20(1).png) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [What We Stand For](https://www.axcethr.com/about-us/what-we-stand-for/) - [Expertise](https://www.axcethr.com/expertise/) - [Employee Benefits](https://www.axcethr.com/services/employee-benefits/) - [Human Resources](https://www.axcethr.com/services/human-resources/) - [Payroll Services](https://www.axcethr.com/services/payroll-and-tax-administration-services/) - [Risk Management](https://www.axcethr.com/services/workers-comp-and-employee-safety-risk-management/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [Subscribe to Latest Resources](https://www.axcethr.com/subscribe-to-the-latest-resources/) - [Resource Library](https://www.axcethr.com/expertise/resource-library/) - [\[ Client Portal \]](https://www.axcethr.com/client-services/) - - - - - Search for: Copyright © 2023 Axcet HR Solutions – Kansas City's PEO Since 1988 | [Privacy Policy](https://www.axcethr.com/privacy-policy/) | [Terms and Conditions](https://www.axcethr.com/terms-conditions/) | [**Join our Team – Careers »**](https://axcethrsolutions.prismhr-hire.com/) 10975 Grandview Drive Suite 200, Corporate Woods Building 27, Overland Park, KS 66210 | Call us: 913-383-2999 *The IRS does not endorse any particular For more information on [certified professional employer organizations](https://www.axcethr.com/why-axcet/certified-peo/), go to [www.irs.gov](https://www.irs.gov).* Remove cookies ![](https://dc.ads.linkedin.com/collect/?pid=43031&fmt=gif) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Katie Herrera, SPHR", "url" : "https://blog.axcethr.com/author/katie-herrera" }, "dateModified" : "2026-02-16T20:18:24.178Z", "datePublished" : "2025-09-09T11:00:00.000Z", "headline" : "Rising Cost of Group Healthcare in 2026: Key Drivers", "image" : [ "https://blog.axcethr.com/hubfs/group-health-insurance-premium-increase-2026-_1200-x-628-px_%20(1).webp" ], "mainEntityOfPage" : { "@id" : "https://blog.axcethr.com/rising-cost-of-group-healthcare-in-2026-key-drivers", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.axcethr.com/hubfs/_logo_axcethr_primary.png" }, "name" : "Axcet HR Solutions" } } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.axcethr.com/#organization", "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "US", "addressLocality" : "Kansas City", "addressRegion" : "MO" }, "aggregateRating" : { "@type" : "AggregateRating", "bestRating" : "5", "ratingValue" : "5", "reviewCount" : "100" }, "areaServed" : { "@type" : "Country", "name" : "United States" }, "award" : [ "IRS Certified Professional Employer Organization (CPEO)", "Award-Winning HR Solutions Provider", "SHRM Certified HR Professionals", "HRCI Certified HR Professionals" ], "contactPoint" : { "@type" : "ContactPoint", "areaServed" : "US", "availableLanguage" : "English", "contactType" : "Customer Service" }, "description" : "Award-winning Professional Employer Organization (PEO) providing comprehensive HR solutions, payroll services, employee benefits, and risk management to small and mid-sized businesses. 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Experts warn that employers could see double-digit jumps — anywhere from 10% to 20% — as catastrophic claims, costly specialty drugs, including GLP-1, and lingering post-pandemic health issues continue to drive expenses higher. For many organizations, these increases are pushing benefits budgets to the breaking point and forcing difficult choices about plan design, employee cost-sharing and whether to continue offering coverage at all. Why Are Healthcare Costs Rising? Numerous factors, including inflation, higher prices for specialty drugs and increased demand for care, all contribute to the steady climb in medical insurance premium increases. More advanced and expensive technology in diagnostics and treatment also drives small business group health insurance premium increases, as do the long-term effects of delayed care during the pandemic that are spiking more complex, costly claims as untreated conditions resurface. Other factors include a continuing shortage of healthcare workers, increasing disease prevalence, particularly among younger workers, and the higher treatment and medication needs of an aging workforce. GLP-1 Drugs and Rising Employer Health Insurance Costs A major factor accelerating premium increases is the surge in prescriptions for GLP-1 drugs like Ozempic, Mounjaro, Wegovy and Zepbound. While developed for diabetes, much of today’s demand comes from employees seeking them for weight loss. CFO recently reported that more employers are expanding coverage for weight-loss use — and the costs are significant. Employees on GLP-1 therapy can generate nearly double the medical and pharmacy expenses of non-users, often reaching tens of thousands of dollars per person each year. As these costs are spread across the entire group plan, premiums and cost-sharing rise for all employees, not just those taking the drugs. This growing reliance on GLP-1s highlights why many employers are bracing for sharper cost increases in 2026 and beyond. Some organizations are considering prior authorization requirements, coverage limits or other controls to help keep spending in check, but each approach carries trade-offs in employee satisfaction and retention. RELATED: Benefits Renewal Process Checklist - Steps to Take Before Open Enrollment Starts >> The Impact on Small Businesses For small businesses, which face higher per-employee costs and, on their own, limited negotiating power with insurers, the rising cost of group healthcare is forcing tough decisions about plan design, cost-sharing and, in some cases, even whether to continue offering coverage at all. A small business medical insurance premium increase of even a few percentage points can have a significant impact on operating budgets. At the same time, traditional cost-containment strategies – like increasing deductibles, raising required employee contributions and narrowing provider networks – can jeopardize employee satisfaction and retention if taken too far. Small Business Strategies to Manage Rising Group Healthcare Costs Understanding the forces behind premium increases helps business owners navigate the challenges of rising group healthcare costs. The following strategies are worth considering as your small business works to manage expenses while continuing to offer benefits that aid in retaining talented and productive workers: Shop the Market for Better Rates Working with an experienced broker or your PEO can help uncover more affordable plan options. By shopping the market and exploring different carriers, employers may find plans that better fit their budget. Considering structures like high-deductible health plans paired with Health Savings Accounts can also reduce premiums and spread costs more effectively. RELATED: Small Business Health Insurance Broker vs PEO >> Implement Wellness Programs Investing in preventive health initiatives like fitness challenges, gym subsidies and mental health support can improve employee well-being, reduce future claims and demonstrate a commitment to workforce health. Adjust Employee Contributions Carefully While increasing employee cost-sharing can help manage premium costs to your company, the decision to ask employees to pay more should be approached thoughtfully to avoid damaging morale or retention. Transparent communication and gradual implementation are key. Offer Health Reimbursement Arrangements (HRAs) HRAs, including Qualified Small Employer HRAs (QSEHRAs) and Individual Coverage HRAs (ICHRAs), allow employers to reimburse employees tax-free for individual insurance premiums and medical expenses. This approach offers flexibility, cost control and greater personalization compared to traditional group plans, making it an appealing alternative. Partnering with experts at a certified professional employer organization (CPEO) can help small businesses design benefits strategies that balance cost and employee satisfaction. As a CPEO with long-standing expertise in health benefits consulting, Axcet HR Solutions can leverage its buying power to give small businesses access to competitive pricing that otherwise would be out of reach. Axcet can also handle benefits administration, compliance and employee communication, relieving small business owners of those burdens and freeing them to focus on growth. RELATED: Avoid Making the Nine Most Common Employee Benefits Mistakes >> Looking Ahead In today’s market, small businesses that take a proactive approach to benefits planning are better positioned to manage the rising cost of group healthcare. As a trusted certified PEO, Axcet provides the expertise, scale and tools that help smaller organizations ensure that quality employee healthcare remains a sustainable part of their business plan.", "author" : { "@id" : "https://blog.axcethr.com/author/katie-herrera#author", "@type" : "Person", "name" : "Katie Herrera, SPHR", "url" : "https://blog.axcethr.com/author/katie-herrera" }, "dateCreated" : "2025-09-09", "dateModified" : "2026-02-16", "datePublished" : "2025-09-09", "description" : "The nationwide trend of rising group healthcare costs shows no signs of slowing, and small businesses should brace for another year of steep premium increases in 2026. 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