Employer Health Care Costs in 2026: What’s Driving the Spike and What’s Actually Working

Do Digital Health Programs Reduce Employer Health Care Costs?

Employer health care costs in 2026 are rising at their fastest rate in over a decade, and every major forecaster is sounding the alarm. Mercer projects a 6.5% average increase per employee – the highest since 2010. The Business Group on Health puts it at 7.6% after plan design changes. Aon says 9.5%, and the International Foundation of Employee Benefit Plans forecasts a full 10%.  

No matter which number you use, the story is the same: this is the fourth consecutive year of elevated cost growth, and there’s no relief on the horizon.

Employers are responding the only way most know how – raising deductibles, increasing employee contributions, and conducting RFPs on vendors that haven’t proven their value. Nearly 60% of employers plan to make cost-cutting changes to their health plans this year, up from 44% just two years ago.

But cutting isn’t a strategy – it’s a reaction, and it doesn’t solve the underlying problem.

The harder question – and the one that matters for 2027 planning and beyond – is whether anything in the benefits ecosystem is delivering measurable savings at scale. Not engagement metrics or app downloads, but savings that show up in claims data.

The cost drivers everyone’s talking about

The usual suspects are driving this spike: rising utilization as post-pandemic deferred care works through the system, GLP-1 drugs adding billions to pharmacy spend, increasing cancer diagnoses, and growing demand for mental health services. At the same time, hospital consolidation continues to push unit prices up and specialty drug costs are climbing faster than medical.

For benefits leaders, this creates a compounding problem. Chronic conditions – diabetes, hypertension, musculoskeletal disorders, mental health, weight management – account for 90% of U.S. healthcare spending. These are the conditions filling emergency rooms with visits that could have been prevented, driving up high-cost claims, and generating the utilization trends that show up in every actuarial forecast.

The market’s response over the past decade has been to layer on digital health point solutions – a pattern now recognized as point solution fatigue: one vendor for diabetes, another for MSK, another for mental health, another for weight management. The result, as Solera’s recent survey of 106 senior benefits leaders found, is vendor sprawl – 75% of organizations now manage four or more digital health vendors, with an estimated median annual cost of $580,000 just to keep the vendor stack running.

The result is more vendors, more cost, and in most cases, no unified evidence that any of it is bending the cost curve.

What the claims data shows

Against that backdrop, Solera Health recently published what we believe is a meaningful step toward answering the question that every buyer is asking.

A matched-control claims study of 16,499 health plan members – one of the largest economic evaluations in digital health to date – found that Solera’s curated digital health network delivered $1,241 in total cost of care savings per member over six months, a $2.42 return on every dollar invested, and 55 fewer ER visits and hospitalizations per 1,000 members.

The savings weren’t concentrated in a single category. They were distributed broadly: 37% from routine outpatient care, 32% from hospital and ER, and 31% from pharmacy. That distribution matters because it’s consistent with improved chronic condition management across the board – exactly the kind of broad-based impact that should reduce the utilization trends driving this year’s cost crisis.

For a 100,000-member health plan, these results translate to an estimated $12–$24 million in annual savings, or a 2–4% reduction in total plan claims costs.

Why this evidence is different

The digital health market is full of ROI claims. Most of them compare engaged members against people who never sought treatment – a design that inflates the apparent benefit. Others exclude high-cost members or select favorable subgroups after the fact.

This study did none of that. Control members were actively receiving traditional care for the same conditions – via outpatient visits with relevant diagnoses. That means the $1,241 in savings represents what curated digital health adds on top of conventional care already being delivered and paid for.

The study used propensity score matching across 50+ variables, controlled for seasonal variation, and applied doubly robust estimation, and it was independently validated at the code level by Accorded, LLC, a credentialed actuarial firm (FSA, MAAA). Even at the lower bound of the 95% confidence interval, the savings remain positive at $668 per member.

This isn’t a vendor engagement report – it’s claims-based evidence designed to hold up to actuarial scrutiny.

What this means for 2027 planning

Benefits leaders preparing for 2027 renewals face a choice. They can continue managing a fragmented stack of point solutions – absorbing the administrative cost, the inconsistent evidence, and the rising premiums –  they can pursue benefits vendor consolidation, a model  that has now demonstrated measurable cost savings at scale.

Solera’s curated network model replaces the patchwork with one integration, one contract, and one reporting relationship across 25+ digital health partners spanning eight condition categories, matching members to the right level of care by clinical risk and engagement preferences. Plans pay only when members engage and achieve clinical outcomes.

The cost environment isn’t going to get easier, but the evidence base for a better approach just got a lot stronger.

Key Questions for 2027 Benefits Planning

• What is the projected employer health care cost increase for 2026? (Answer: 6.5%–10% depending on source)
• What does the evidence say about digital health savings? (Answer: $1,241 per member over six months in a matched-control study of 16,499 members)
• What is the ROI on curated digital health networks? ($2.42 per dollar invested)
• How can employers reduce digital health vendor costs? (Consolidation via a curated network model)

Download the full whitepaper: The Network Effect: Proving the Value of Curated Digital Health

‍