The Advisor’s Edge - December 2025
Curated and created by Jim Sampson
Is your renewal giving you sticker shock? You’re not alone.
This has been one of the most difficult renewal seasons I’ve experienced in my 23 years as an employee benefits advisor.
The numbers tell the story: employers are seeing health insurance cost increases ranging from 10% to 30% for 2026—the steepest jump in over a decade. Even some of our captive programs are calling for increases in their stop-loss rates of 15-20%, despite being specifically designed to manage costs more effectively.
What’s driving these unprecedented increases? Three major trends are converging all at once.
The Specialty Medication Surge
Specialty medications have become the dominant cost driver in pharmacy spend. These high-cost drugs, including GLP-1s for diabetes, advanced cancer therapies, autoimmune treatments, biosimilars, and gene therapies, now account for more than half of total pharmacy spending despite serving fewer than 2% of employees.
GLP-1 medications offer a telling example. Initially developed for diabetes management, utilization has exploded as these drugs prove effective for both blood sugar control and weight management. Prescription drug spending among large employers rose 9.4% in 2025, driven mainly by specialty drugs like GLP-1s.
But GLP-1s are just one piece of a larger puzzle. Advanced therapies for cancer, autoimmune conditions, and rare diseases are reshaping pharmacy budgets. In some health plans, a single specialty drug category can represent 10% or more of annual prescription spend—and the pipeline shows no signs of slowing.
The challenge: these medications often deliver real clinical value for employees who need them. The question employers face isn’t whether to cover them, but how to manage their impact sustainably.
Post-Pandemic Catch-Up Care
Employees delayed care during the pandemic. Now they’re back—often with more advanced conditions requiring more intensive treatment.
Outpatient visits, surgeries, and chronic condition management are all rising. This “catch-up wave” is driving a 5% to 10% increase in utilization compared to pre-pandemic levels, and it’s expected to continue through 2026.
Catastrophic Claims Are the New Normal
Million-dollar claims have tripled over the past decade. What used to be rare events are now routine, driven by complex surgeries, specialty drugs, and advanced therapies.
Stop-loss carriers are responding with tighter terms and higher premiums, adding another layer of cost pressure for self-funded employers.
What This Means for You
These aren’t temporary blips. The underlying cost drivers (specialty pharmacy, provider consolidation, deferred care, and utilization increases) aren’t going away.
The challenge isn’t just managing costs. It’s doing so while maintaining coverage that employees value and can actually afford to use.
Traditional employer responses, including raising deductibles and out-of-pocket maximums, and increasing employee contributions, remain viable ways to address these challenges.
However, we’re seeing expanded conversations around high-performance networks, unbundled health plan structures, stop-loss captives, transparent Pharmacy Benefit Managers, reference-based pricing, and enhanced access to behavioral health, urgent care, and primary care through direct primary care (DPC) and virtual primary care (VPC) models.
That’s where strategy meets sustainability.
If your renewal caught you off guard this year, you’re not alone. But understanding what’s driving the increases is the first step toward building a more resilient benefits program for the years ahead.
News You Can Use
HUB Outlook 2026 Now Available
HUB International has released our annual thought leadership campaign, HUB Outlook 2026. This year’s collection includes the comprehensive 2026 North America Report alongside 13 focused industry and product reports covering key insights for both U.S. and Canadian markets.
Whether you’re looking at industry-specific trends or diving deep into particular risk areas, the Outlook series provides strategic perspective for the year ahead. Access all reports here.
Stay Connected with HUB EDGE
Each month, HUB distributes HUB EDGE, our newsletter featuring timely insights on employee benefits, risk management, and insurance trends. If you’d like to receive HUB EDGE or our other communications directly, you can customize your subscriptions at our subscription preference center.
2026 Benefits Cost Trends Report
HUB’s Employee Benefits Actuarial and Financial Consulting Practice published its 2026 Benefits Cost Trends Report in August. The report analyzes the factors driving healthcare cost increases and offers strategic recommendations for employers navigating renewal season.
This data informed much of the feature article in this month’s edition. Read the full report here.
2025 Workforce Vitality Gap Index
If you missed it, HUB recently released the 2025 Workforce Vitality Gap Index, our annual report examining the disconnect between what employers offer and what employees actually value in their benefits programs.
The report identifies key gaps across five generations in the workplace and provides actionable recommendations for closing them. Both the full report and recorded webinar are available at hubinternational.com.
Worth Sharing
My son Grant married his fiancée Colby on the shore of the Sea of Cortez just before sunset on November 24th. I was asked to write a speech for them, and I thought some of the advice I gave them might be helpful to each of us.
Grant has always been most alive when he could serve. Since he was young, he had a gift for leaning in and giving his time, talent, and treasure to others who needed them more. When Colby entered his life, we saw that she shared that desire to serve.
In my toast, I broke down the word SERVE into five pieces of advice:
S is for Struggle. Avoid trying to skip the struggles. That’s where all the lessons live. Everyone wants the result without the process. The success without the failure. The reward without the work. But the struggle isn’t the obstacle. It’s the education.
E is for Experiences. Eleanor Roosevelt once said, “The purpose of life is to live it, to taste experience to the utmost, to reach out eagerly and without fear for newer and richer experiences.” The experiences you share will always mean more than the stuff you acquire.
R is for Revere. To revere is to respect with a tinge of awe. Brag about each other. Celebrate each other’s wins. Never stop dating. Be curious. Be present. Don’t let the monotony of living life together ever let that life become mundane.
V is for Vulnerable. To be vulnerable is to be authentic. Be truthful, even when that truth may cause disappointment. Most things that upset us probably will not matter much in a month, let alone a year. Work to be good at letting little things go.
E is for Evolve. Life will look different in your 30s than it did in your 20s. And it will undoubtedly look different in your 50s than it did in your 30s. More importantly, you will be different. You have to evolve together. Accept change. Even embrace it.
When you can change together and witness all the seasons, you discover something of unspeakable value. You discover what true love really looks like.
We wish Grant and Colby rewarding struggles, memorable experiences, unending reverence, authentic vulnerability, and mutual evolution.
Thank you for reading,
Jim Sampson