2026 Benefits Benchmarks: Key Insights for SMBs

For small and medium-sized businesses (SMBs), benefits programs play a central role in hiring and retention amid tighter budgets, lean teams, and limited resources. 

At this size, the margin for error is thin. Costs rise quickly, compliance risks are easy to overlook, and a single misaligned decision can disproportionately affect finances or employee experience  

That’s why high‑quality benchmarking data — along with visibility into how peer companies are designing and managing their benefits programs — helps employers make more informed decisions while balancing competitiveness, cost control, and administrative efficiency. 

Sequoia’s 2026 Benefits Benchmarking Report, SMB Edition reveals how VC‑ and PE‑backed companies with fewer than 100 employees are approaching healthcare, leave, retirement, and wellbeing programs. 

Below, we highlight key findings from the report that show where SMB employers are keeping benefits lean, where they’re investing more deliberately, and how companies are adjusting programs in response to ongoing cost pressure. 

If you’re interested in getting your company’s benefits programs benchmarked against the full data set, connect with a Sequoia advisor for a complimentary consultation. 

Healthcare Benchmarks

Healthcare strategy among SMB employers is still taking shape. Most organizations are addressing costs incrementally and prioritizing affordability, pharmacy basics, and carrier‑led simplicity over more complex funding or cost‑management approaches.

Here’s how that shows up in the data:

Health plan priorities: Lowering costs leads all priorities at 43%, but 41% of employers selected none of the priorities listed in our survey. This suggests that while cost pressure is present, many employers have not yet defined a clear response strategy.  

Cost-reduction strategies: Despite cost reduction being a priority, most small employers don’t yet have a defined cost-reduction approach. Fifty‑seven percent said they aren’t adopting any of the cost strategies listed in our survey, such as sunsetting programs, eliminating plans, and adding voluntary benefits. The leading tactic — increasing employee contributions and cost sharing — reached only 14%. 

Affordability strategies: Affordability strategies became a greater focus this year with the share of employers taking action to improve affordability increasing from 26% to 49% year over year. The share of employers lowering employee contributions increased from 21% to 37%. This data suggests that when employers take action, they prioritize reducing the costs employees feel most directly through payroll deductions. 

Pharmacy clinical management: Employers are building out pharmacy strategies gradually, starting with basic controls and leaving more advanced oversight for later. Generics and biosimilars are the most common starting point at 21%, while utilization management for GLP-1s for weight loss appears in only 9% of programs.  

Fertility benefits: Seventy-seven percent of employers offer no fertility coverage, and advanced fertility benefits reach just 17%. These benefits remain an emerging, premium tier offering that some employers are using to strengthen their employer brand and employee value proposition. 

Explore the benchmarks:

2026 Leave Program Benchmarks

Leave strategies continue to emphasize stability and compliance. Most SMB employers are maintaining existing policies and focusing on administration, coordination, and clarity rather than expanding programs or introducing new leave types.

Here’s how that shows up in the data:

Policy drivers (next 12 to 24 months): Leave policies are focused on attraction and retention. Regulatory pressure leads at 43%, but employee demand (38%), budget discipline (34%), and talent considerations (32%) follow closely behind.  

Challenges: Operational demands continue to outweigh policy design challenges. Compliance (57%), coordination (50%), and tracking (49%) rank highest among challenges, indicating that for smaller employers, difficulties tend to emerge in day‑to‑day management rather than in determining which policies to offer. 

Program changes: Few employers expect to change leave policies in the next 12 months. Most are maintaining existing programs while focusing on compliance, cost management, and administration. Only 9% plan to expand leave and 3% plan to reduce it. 

PTO and parental leave: These benefits have become standard offerings. With PTO offered by 100% of employers and parental leave by 93%, differentiation now comes from how leave is structured and administered.  

Explore the benchmarks:

2026 Retirement Plan Benchmarks

Retirement benefits remain steady and increasingly standardized. Early eligibility, simple matching formulas, and familiar plan features dominate. Improvements are focused more on participation and savings behavior than on major design changes.

Here’s how that shows up in the data:

Plan design: Roth contributions are now a standard feature at 90%. After‑tax contributions and self‑directed brokerage windows each sit at 30%, pointing to gradual expansion rather than increasingly complex plan structures.  

Tenure requirements: Early access remains the norm. Sixty‑six percent allow participation at hire, and another 15% open access within one month, keeping barriers to saving low. 

Matching contributions: Employers favor matching formulas that are straightforward to communicate and administer. Fifty‑three percent of plans offer a match, with safe harbor structures representing 51% of those plans.  

Match effective rate: Match effective rates remain concentrated around familiar, sustainable contribution formulas. Thirty‑nine percent of plans use a 4% effective match, and 29% use 3%.  

Automatic enrollment: Auto‑enrollment adoption has held steady, but default contribution rates are increasing. The share of plans setting defaults above 6% increased from 11% to 28%, signaling a stronger push toward higher savings rates earlier in employees’ tenure. 

Explore the benchmarks:

2026 Wellbeing Benefits Benchmarks

Employers are favoring familiar, lightweight offerings with low administrative burden while scaling back broader initiatives as budgets and bandwidth remain constrained. 

Here’s how that shows up in the data:

Program adjustments: Employers are largely keeping existing wellbeing programs in place. Eighty‑one percent are maintaining current offerings, while only 15% are making limited additions. 

ROI metrics: Companies primarily rely on qualitative and quantitative measures to gauge the success of their wellbeing programs. Employee feedback is the most commonly used metric at 74%, followed by participation and utilization tracking at 69%. 

Wellbeing benefits categories: Emotional support is the most common entry point for wellbeing benefits, but overall coverage is still uneven. While 59% of employers offer emotional support, 33% offer none of the listed categories, leaving many teams with limited support options. 

Explore the benchmarks:

Benchmark Your Benefits Against the SMB Market

The insights highlighted here represent just a part of what’s included in Sequoia’s 2026 Benefits Benchmarking Report, SMB Edition. The full report provides deeper SMB‑level benchmarks across healthcare, leave, retirement, and wellbeing, including:  

• Plan offerings and requirements 
• Family‑forming benefits  
• Disability programs 
• Self‑funding and stop‑loss coverage 
• Leave policy structures and durations 
• Retirement participation, vesting, and matching 
• Wellbeing program offerings and priorities 

For benefits leaders making high‑stakes decisions, benchmarking provides the context needed to pressure‑test programs, validate tradeoffs, and plan what comes next with confidence. Connect with a Sequoia advisor for a complimentary benefits benchmarking consultation based on our latest data. 

Dylan Hughes — Dylan has more than 7 years of experience delivering market insights on compensation and benefits with a primary focus on benchmarking. He leads the market insights program at Sequoia, which provides the latest analytics, market trends, and benchmarking data.