Midyear is a good time to take stock. There is enough of the plan year behind you to see what is working, and enough runway ahead to change course before the 2027 open enrollment season. Below are five trends shaping the second half of 2026, what each one means for employers, and what you can do about it now.

1. Healthcare costs are projected to hit a record high in 2027

Plan for a 9% increase. PwC’s annual Behind the Numbers medical trend report projects the commercial healthcare cost trend will reach 9% in 2027, the highest in 17 years and an increase from the 8.5% that held steady over the past several years.

Chronic conditions remain the main driver. The U.S. Centers for Disease Control and Prevention reports that 90% of the nation’s nearly $5.3 trillion in annual healthcare spending goes toward people living with chronic and mental health conditions. Specialty medications, particularly glucagon-like peptide-1 (GLP-1) drugs, and cancer care add further pressure. Nearly 70% of health plans surveyed by PwC named artificial intelligence (AI) coding tools on the provider side as a top-three cost driver for 2027.

The longer view is steeper still. The U.S. Centers for Medicare & Medicaid Services projects national health expenditures will reach roughly $9 trillion a year by 2035. If you are preparing for 2027 plan design, treat this as a turning point for your cost-containment strategy rather than another routine annual increase.

2. How is AI changing benefits administration?

It is already handling real work, and adoption is uneven between employers and employees. Mercer’s Global Talent Trends study found that roughly 40% of HR leaders now use AI for benefits administration, and Mercer estimates AI and automation could replace more than half of a rewards team’s workload.

Employees are slower to follow. Prudential’s 2026 Benefits & Beyond study found that 83% of employers want AI to help employees understand their benefits, but only 24% of employees currently use it, largely because of trust and privacy concerns.

That gap is the opportunity. If you are building AI into your benefits strategy, be transparent with employees about when AI is shaping a recommendation, keep human oversight on complex cases, and test recommendation engines regularly for bias. Trust is what turns the tool into something people actually use.

3. Fertility benefits are shifting from perk to expectation

Employers expanded family health benefits by an average of 39% year over year, according to Maven Clinic’s 2026 State of Women’s and Family Health Benefits report. With infertility affecting roughly 1 in 6 people globally, fertility coverage is increasingly treated as a core part of the benefits package rather than an extra.

Two forces are driving the growth: federal guidance that makes fertility coverage easier to offer, and state laws that increasingly require it. On May 10, 2026, the U.S. Department of Labor (DOL) and other federal agencies proposed a new category of limited excepted benefits for fertility coverage, with an intended effective date of Jan. 1, 2027.

State mandates are expanding at the same time. Earlier this year, California joined more than 20 states requiring fertility benefit coverage, and large group health plans there must now cover fertility services, including in vitro fertilization (IVF), for plans issued, amended, or renewed on or after Jan. 1, 2026. Virginia will require its essential health benefits benchmark plans for 2028 to include fertility treatment and diagnosis, with up to three cycles of assisted reproductive technology per lifetime.

What to do depends on how your plan is funded. If you are fully insured, confirm your offerings meet the mandates in every state where you have employees. If you are self-funded, watch the DOL’s proposed rule closely. It could open a more affordable path to offering fertility coverage outside your core group health plan.

4. What should employers do about GLP-1 costs?

Tighten the criteria before renewal. GLP-1 medications now drive approximately 20.3% of prescription spending at large self-funded plans, according to the Benefitfocus State of Employee Benefits Report 2026, and a 2026 Business Group on Health survey found nearly 8 in 10 employers say GLP-1s are raising their healthcare costs.

The pipeline keeps growing. The Wegovy pill became the first oral GLP-1 available for weight loss in early 2026, the U.S. Food and Drug Administration approved Eli Lilly’s Foundayo in April, and candidates such as retatrutide and CagriSema are posting strong efficacy data ahead of expected approvals.

At roughly $6,000 per participant a year, and with a return on investment that is hard to measure within the time most employees stay with an employer, these drugs are difficult to budget for. For 2027, keep refining eligibility criteria, prior authorization requirements, and any lifestyle program participation you require alongside coverage.

5. New prescription drug channels are bypassing traditional PBMs

Two parallel developments are challenging the traditional pharmacy benefit manager (PBM) model, and both move spending outside the contracts employers rely on for data.

TrumpRx adds competition

TrumpRx.gov, a government platform launched Feb. 6, 2026, under the administration’s most-favored-nation pricing initiative, connects cash-paying consumers directly to manufacturer discounts. Under a November 2025 agreement between the administration, Novo Nordisk, and Eli Lilly, GLP-1s are priced at around $350 a month through the platform.

There is a catch worth explaining to employees. KFF analysts note that most people with insurance are generally better served using their coverage, because purchases made through the platform do not count toward a deductible or out-of-pocket maximum.

Ahead of the launch, the U.S. Department of Health and Human Services Office of Inspector General concluded in a January 2026 Special Advisory Bulletin that manufacturer-led direct-to-consumer drug programs can be structured to present a low risk under the federal Anti-Kickback Statute. It stopped short of creating a formal safe harbor.

Direct-to-employer platforms reshape the market

Direct-to-employer (DTE) platforms remove the PBM from the employer side of the equation. A study published in the Annals of Internal Medicine found that for insured patients with generic copayments above $15, a direct-to-consumer pharmacy offered a lower price nearly 80% of the time. That gap has driven employer interest in platforms offering fixed, transparent pricing outside the PBM channel, particularly for GLP-1s.

Both trends create blind spots. Purchases made outside the PBM channel leave gaps in your utilization data, which makes plan design harder to get right. Neither model is likely to replace traditional PBM arrangements broadly in the near term, but expect carve-out options to keep growing into 2027.

Frequently asked questions

How much will healthcare costs rise in 2027? PwC projects the commercial healthcare cost trend will reach 9% in 2027. That is the highest figure in 17 years, up from the 8.5% trend of the past several years.

Why are GLP-1 drugs such a large cost concern for employers? GLP-1s account for about 20.3% of prescription spending at large self-funded plans and cost roughly $6,000 per participant a year. Nearly 8 in 10 employers say the drugs are raising their healthcare costs.

Are employers required to cover fertility treatment? It depends on the state and how the plan is funded. More than 20 states require fertility benefit coverage, including California as of Jan. 1, 2026. Federal agencies have also proposed a new excepted benefit category for fertility coverage, intended to take effect Jan. 1, 2027.

Should employees use TrumpRx instead of their health plan? Usually not. KFF analysts note that people with insurance are generally better served using their coverage, because TrumpRx purchases do not count toward a deductible or out-of-pocket maximum.

When should employers start planning for 2027 open enrollment? Midyear. Reviewing plan design, vendor partnerships, and cost-containment strategy in the second half of the year leaves time to make changes before open enrollment begins.

The Bright Side

Rising costs and a shifting drug market are a lot to track on top of running a benefits program. Daybright helps employers read trends like these against their own plan data, then act on them, from plan design and vendor strategy to compliance, through one partner for Employee Benefits, Retirement, Compliance, and Individual Financial Planning. Want to talk through what these trends mean for your 2027 planning? Contact us

This post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. Content sourced from Zywave.

Source: Adapted from Zywave’s 2026 Midyear Employee Benefits Market Outlook. Statistics are attributed to their original sources. © 2026 Zywave, Inc. All rights reserved.

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