Rising health care costs have climbed from the sixth-largest employer concern in 2021 to the top concern in 2026, according to a new report from benefits platform Espresa, underscoring the growing pressure organizations face as prescription drug spending continues to accelerate.
The company's 2026 Lifestyle Spending Account Benchmark and Trends Report found that 64% of employers are experiencing significant budget strain from benefit costs. At the same time, employees are feeling the impact as well, with 59% reporting they delayed medical care over the past year because of cost and 45% saying health care and prescription expenses have left them financially stretched.
Much of the pressure is being driven by the rapid growth of GLP-1 medications. According to the report, employer spending on GLP-1 drugs doubled in a single year, rising from $11 to $24 per member per month. GLP-1s now account for 10.5% of all prescription drug claims, up from 6.9% in 2023.
The medications are also influencing employee perceptions of benefits. One in four workers said access to GLP-1 treatments directly affects how they view their employer's benefits offerings.
"Rising benefit costs, especially for specialty drugs like GLP-1s, place a massive strain between HR teams who want to retain top talent and finance teams focused on the bottom line," said Alex Shubat, co-founder and CEO of Espresa, in a statement.
Rather than reducing benefits, many employers appear to be adjusting how they allocate their spending. The report found that 57% plan to rebalance or reallocate existing benefits budgets over the next three years.
One area attracting increased investment is Lifestyle Spending Accounts (LSAs), which allow employees to use employer-provided funds across a range of approved wellness, financial and personal development expenses. Espresa reported that clients added nearly $250 million in new LSA funding during the past year, representing a 45% increase.
The report also found employees are using those funds for a wider range of needs than traditional wellness programs typically address. Alongside fitness and wellness expenses, popular purchases included tax preparation services, financial planning and hobby classes.
Espresa reported that 95% of organizations using LSAs saw improved employee retention, with a median retention improvement of nearly 20%.
The findings are based on more than 550,000 employee claims across more than 100 countries and $547 million in managed benefits funds.
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