The 2026 SHRM Benefits Survey Says a Lot About Where Employee Benefits Are Headed

Healthcare continues to sit at the top of the benefits hierarchy. SHRM found that 88% of employers consider healthcare benefits very or extremely important to their workforce, with retirement and leave benefits following at 82%. None of that should be surprising. For most employers, the health plan is one of the largest expenses outside of payroll and one of the benefits employees care about the most. The problem is that it is also becoming increasingly difficult to manage.

Medical costs continue to rise at rates that employers simply cannot absorb forever. Prescription drug costs are creating even more pressure, while specialty medications, chronic conditions and a relatively small number of high-cost claimants can dramatically change the financial performance of a plan in a very short period of time. That is why I think the most important question coming out of this report is not whether healthcare remains important. Of course it does. The real question is whether employers are finally starting to change the way they purchase and manage it.

One of the findings that stood out to me was the continued movement toward self-funded health plans. According to SHRM, the percentage of employers offering fully insured plans declined from 70% in 2025 to 67% in 2026, while self-funded plans increased from 27% to 29%. That may not look like a major shift in a single year, but I think it is meaningful.

For years, the default approach for many employers has been fairly predictable. They receive the renewal, negotiate with the carrier, increase the deductible, adjust employee contributions, maybe shop the market, and then repeat the process again the following year. That strategy was easier to live with when healthcare inflation was more manageable. It becomes much harder to defend when medical costs continue increasing at high single-digit rates.

Self-funding is not the right answer for every employer, and it is important to say that. A poorly structured self-funded plan can create just as many problems as a poorly managed fully insured plan. The difference is that self-funding can give employers something that has become increasingly valuable: control. It can provide better access to claims information and more control over the PBM, stop-loss, networks, pharmacy strategy, cost-containment vendors and overall plan design. Most importantly, it gives employers a better opportunity to understand where their healthcare dollars are actually going.

That visibility matters even more today because employers have increasing fiduciary responsibilities around their health plans. It is difficult to responsibly manage something when you cannot see what is happening underneath the plan. I expect we will continue seeing self-funded and level-funded arrangements move further down-market over the next several years, particularly as smaller and midsized employers look for alternatives to double-digit fully insured renewals.

The pharmacy section may have been the most interesting part of the entire report. SHRM reported a significant decline in prescription drug coverage bundled directly with medical coverage while the use of third-party pharmacy management programs increased. To me, that is a pretty clear indication that employers are starting to question the traditional pharmacy model.

They should be. Pharmacy has become one of the fastest-growing and most complicated areas of healthcare spending. Specialty drugs, GLP-1 medications, rebates, spread pricing, formulary decisions, specialty pharmacy arrangements and PBM contract language can all have a major impact on what an employer ultimately pays. For too many plans, pharmacy has historically been treated as something that simply comes attached to the medical plan. The employer accepts the PBM arrangement, looks at the overall renewal and rarely digs any deeper into how the pharmacy program actually works.

That approach is becoming increasingly difficult to justify. Employers need to understand how their PBM is compensated, where rebates are going, how the formulary is constructed, what happens with specialty drugs and whether there are lower-cost alternatives available. Pharmacy strategy can no longer be treated as a small piece of the medical plan. For many employers, it has become one of the biggest opportunities to materially change plan costs.

SHRM found that 47% of employers cover GLP-1 medications for Type 2 diabetes, while only 15% cover them for weight management. That gap tells you a lot about where employers are today. There is broad recognition that these medications can produce meaningful clinical results for appropriate patients, but employers are struggling with the financial impact of broad access.

I don't think the long-term answer is simply unlimited GLP-1 coverage, but I also don't think blanket exclusion is always the right answer. The better approach is probably to stop asking whether the plan covers GLP-1s and start asking what the employer's strategy is for obesity, diabetes, and metabolic health. That could include nutrition counseling, primary care, behavioral support, clinical eligibility requirements, utilization management, continuation standards and appropriate medication therapy.

SHRM also reported an increase in nutritional counseling, which fits directly into this trend. Employers are beginning to think more broadly about managing the underlying condition instead of simply paying for a prescription. That is a much better way to approach the issue.

As employers look for ways to reduce pharmacy costs, there has also been an explosion of specialty vendors promising savings. Some of those solutions are very good and can create meaningful value. Others are not. Adding another vendor to the health plan does not automatically mean the employer has solved the pharmacy problem.

Employers need to understand where the claimed savings actually come from. How is the vendor compensated? What happens to rebates? How are medications sourced? How does the program interact with the PBM and the TPA? Will stop-loss recognize the claims? Are manufacturer assistance programs being used appropriately? Are there compliance issues? Is the vendor measuring savings against the employer's actual net cost or against an inflated reference price?

Those questions matter. The healthcare system already has plenty of middlemen. The answer to excessive complexity cannot simply be adding another middleman without understanding the economics of the arrangement.

SHRM reports that 84% of employers continue to offer PPO plans. That is not surprising. Employees understand PPOs, HR departments understand them and providers understand them. They are familiar and relatively easy to administer. The problem is that familiarity and efficiency are not the same thing.

For too many employers, the annual health plan strategy still comes down to choosing between several versions of essentially the same PPO. One option may have a $1,500 deductible, another might have a $2,500 deductible, and another might include an HSA. When healthcare costs are increasing at high single-digit rates, moving the deductible another $500 won't solve the underlying problem.

Employers have to start looking beneath the plan design. Where are employees receiving care? Which hospitals are they using? What are those hospitals charging? How effective is the network? How much of total spending is coming from specialty drugs? How many high-cost claimants are driving the plan? Could better primary care, navigation, centers of excellence, direct contracting or site-of-care strategies materially change the economics? Those questions are far more important than whether the office copay is $30 or $40.

SHRM also shows that HSAs remain widely used, with 63% of employers offering them. I think employers still underutilize both HSAs and HRAs as strategic tools. Too often, these accounts exist simply because they came attached to a particular plan design.

Employers can do a lot more with them. An HRA can be designed to encourage employees to use higher-quality or lower-cost providers. Employer HSA contributions can help soften the transition to a different plan design or support broader engagement goals. These accounts should support the employer's overall healthcare strategy rather than simply becoming another acronym on the benefits summary.

Outside of healthcare, the continued growth in paid leave stood out. SHRM found that paid parental leave increased from 39% to 46%, paid maternity leave increased from 38% to 44%, and paid prenatal leave also increased significantly. I think employers will need to keep paying attention to this area.

Employees do not evaluate benefits one at a time. They look at the entire package: healthcare, retirement, paid leave, flexibility, family support and financial wellness. Together, those benefits influence how employees view the organization and whether they see value in the overall compensation package.

That does not mean employers need to offer every benefit imaginable. In fact, I think the opposite is better. Employers should determine which benefits matter most to their workforce and spend their money there. Having 40 benefits that few employees understand or use is not necessarily better than having 15 benefits that employees truly value.

The SHRM survey also shows some pullback in how employers view flexible work. Hybrid work declined slightly, as did flextime, while more employers are experimenting with four-day workweeks and temporary work-from-anywhere arrangements.

I do not think that means flexible work is going away. I think it is becoming more practical and more tailored to the employer. During and immediately after the pandemic, flexibility itself became the benefit. Now employers are trying to determine where it actually works operationally and where it does not.

That is exactly what they should be doing. A construction company and a software company should not have the same workplace strategy. A manufacturing plant and an accounting firm should not either. Benefits work the same way. The best strategy fits the workforce rather than simply following whatever the broader market happens to be doing.

One of the numbers I found most interesting had nothing to do with insurance. Employer-paid AI subscriptions increased from 16% in 2025 to 33% in 2026, essentially doubling in a year. At the same time, SHRM reported declines in several areas of employee training.

That creates an interesting disconnect. Companies are giving employees access to AI faster than they are teaching them how to use it effectively. I think that will become a major workforce issue. Giving someone access to ChatGPT, Copilot or another AI platform does not automatically make that person more productive. Employees need to understand how to use these tools, how to validate the information they receive, how to protect confidential information and when human judgment still needs to override the technology.

The employers that ultimately get the most value from AI won't be the ones that simply buy subscriptions. They are going to be the ones that rethink workflows, train employees and determine where AI can actually improve productivity and decision-making.

When I look at the SHRM report as a whole, I see one larger theme: employers are becoming more selective. Healthcare costs too much. Pharmacy is becoming too complicated. Employees expect more. Technology is changing quickly. Employers have limited resources, and simply buying more benefits every year is not sustainable.

A better approach is to get more value from what employers are already spending. That means understanding the health plan instead of simply renewing it. Employers need access to claims information, a better understanding of their PBM contracts, a clear view of funding alternatives, meaningful stop-loss analysis and measurable expectations for vendors. They need to understand where employees are receiving care, which conditions are driving costs and whether the programs they have put in place are actually producing a return.

Most importantly, employers need to stop treating the benefits renewal as an insurance transaction that happens once a year. That model is becoming outdated. Benefits strategy needs to be an ongoing process that combines financial analysis, clinical strategy, vendor management, employee engagement and long-term planning.

The companies that manage benefits well over the next several years will not necessarily be the employers with the richest plans or the employers spending the most money. They will be the ones that understand where their money is going, challenge the status quo and make intentional decisions about what they are trying to accomplish.

That is the bigger message I take away from the 2026 SHRM Employee Benefits Survey.

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*Source: SHRM, 2026 Employee Benefits Survey Executive Summary. The 2026 survey included responses from 5,472 HR professionals representing organizations across the United States.*