Total Rewards News Roundup: 2026 Health Costs, Rising Inflation

Data already indicated that health care costs would jump next year, but a new survey reveals that employers are bracing for the biggest health care cost hike in 15 years.

The total health benefit cost per employee is expected to rise 6.5% on average in 2026 — the highest increase since 2010 — even after accounting for planned cost-reduction measures, according to a new survey from Mercer. If employers do not make any changes to their current plans, the overall average increase would reach nearly 9% on average. The projection for 2026 signals mounting pressure on employers' health care budgets and will likely cause them to shift more costs to employees, among other cost-cutting strategies, experts said. 

That's a similar finding to other recent data from the International Foundation of Employee Benefit Plans (IFEBP), a nonprofit organization based in Brookfield, Wis., which found that organizations are projecting a 10% hike in health care costs in 2026.

"It's definitely a concern," said Kimberly Landry, associate research director at LIMRA, an insurance industry trade association based in Windsor, Conn. "We had a couple years where the health care cost trend wasn't as high, and now it's shooting up again. It's clearly a huge challenge for employers and employees." 

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Health care cost projections are just one of the biggest total rewards developments in the news. Here's a look at other recent news in the compensation and benefits space. 

Inflation Heated Up in August as Tariffs Hit Prices

Inflation rose again in August, moving further from the Federal Reserve's goal of 2% and providing evidence that tariffs are putting upward pressure on prices. The consumer price index for August increased 0.4% on a monthly basis and rose 2.9% for the 12 months ending in August. That news has repercussions for employers, according to experts. 

How to Build and Sustain a Smart Compensation Strategy

While designing an effective compensation plan is a top challenge for employers — as they deal with economic volatility, competing priorities, growing employee desires, pay legal requirements, and more — there is a clear first step to getting it right, according to HR and benefits experts. Employers need to begin by understanding their business goals. Discover more steps to building an effective compensation strategy.

DOL Agenda Includes ESG Fiduciary, Drug Coverage Proposals 

The U.S. Department of Labor is eyeing fiduciary changes and drug price transparency in an effort to reduce regulatory burdens, the department unveiled this month in its semiannual regulatory agenda. Those potential benefits changes are among the some 150 proposals on the department's agenda item list.