Gallagher’s 2026 Benefits Benchmarks Report published in September 2026 gives employers a clear warning about the current renewal cycle. Thirty-six percent of surveyed organisations reported health plan premium increases of at least 10% at their latest renewal, compared with 27% in 2025. Only half said they were managing healthcare costs effectively. Specialty drugs were identified as a leading cost challenge by 49%, while 22% currently cover GLP-1 medicines for weight loss.

Cost pressure is becoming harder to absorb

The figures describe a US market, so multinational employers should not export them mechanically to every country. They do, however, illustrate a broader governance problem. Aggregate cost growth can conceal several different drivers: provider prices, utilisation, demographic change, high-cost claims, new therapies, pharmacy contracts and changes in employee cost sharing. A single renewal percentage does not show which driver matters or which response is proportionate.

A cost dashboard should separate the drivers

Benefits committees need a small set of measures that can be reconciled from one period to the next. Medical and pharmacy trends should be shown separately. Large claims should be distinguished from recurring utilisation. Plan design changes and employee contributions should be isolated so that a lower employer cost is not mistaken for an efficiency gain when it is mainly a transfer to employees.

For multinational programmes, the same logic applies at country level. Local financing arrangements, statutory coverage and provider markets differ, but headquarters can still require a common explanation of variance. A useful dashboard records the baseline, the forecast, actual experience, the principal drivers and the management response. It should also identify where data are incomplete or not comparable.

Self-funding is a financing decision, not a cure

Gallagher also reports stronger employer interest in self-funded arrangements. Self-funding can improve access to claims information and give an employer more control over plan design. It also increases exposure to volatility, operational demands and fiduciary responsibilities. The decision therefore needs a risk tolerance, credible loss scenarios, stop-loss analysis and a clear account of who will manage claims, networks and pharmacy benefits.

Pooling and captive arrangements can add another layer for multinational groups. They may improve oversight and retain a share of predictable risk, but they do not remove medical inflation. Their value depends on data quality, scale, contract terms and the ability to act on the information produced.

Employee value remains part of the equation

Cost control that reduces access, shifts expense abruptly or makes benefits harder to navigate can weaken recruitment and retention. Employers should therefore test each intervention against employee outcomes as well as budget impact. That includes access to treatment, adherence, absence, financial exposure and understanding of the plan.

The practical next step is a benefits cost review that links financial variance to clinical and operational evidence. It should identify two or three actions, assign owners and define how results will be measured. In a high-inflation environment, disciplined governance is more useful than a broad instruction to cut costs.

Questions for the next benefits review

The review should begin with decisions rather than data collection for its own sake. Management can ask which cost movements require action, which are temporary and which reflect a lasting change in treatment or workforce needs. It should then identify the minimum evidence needed to answer those questions and assign responsibility for obtaining it from carriers, administrators, pharmacy managers and local teams.

Three tests help prevent weak savings claims.

• First, compare the result with the counterfactual, including the cost expected without the intervention.
• Second, record effects on employees, such as access, contribution levels and disruption.
• Third, revisit the action after implementation to see whether utilisation or cost has shifted elsewhere.

A governance process that keeps these distinctions visible can support better renewal choices and a more credible conversation between HR, finance and the board.

The review should also set a timetable. Data should be assembled before renewal negotiations begin, options should be compared on a consistent basis, and decisions should be recorded with their assumptions. A post-renewal review can then confirm what changed in price, coverage and employee contribution. This simple cycle turns renewal from an annual procurement event into a continuing management process.

Sources : Gallagher – Rising Healthcare Costs Push Employers Toward Greater Benefits Oversight ; WorldatWork – Rising Costs and Scrutiny