How Enterprise Employers Are Pursuing Cost Control Without Benefit Cuts in 2026

Despite rising costs, enterprise employers aren’t pulling back on benefits in 2026. They’re taking a closer look at where dollars are going, paying more attention to how programs perform, and finding ways to stay competitive. competitive without letting benefits spending grow unchecked.

New data from Sequoia’s 2026 Benefits Benchmarking Report, Enterprise Edition shows that organizations with 500 or more employees are preserving core benefits while introducing tighter controls around spending, utilization, and administration.

Here are some key findings from our report.

Healthcare Remains the Center of Cost-Control Efforts

As the largest source of benefits spend, healthcare continues to be the focus area for cost management.

More than eight in 10 enterprise employers say lowering or mitigating healthcare costs is a priority over the next two years, making it the most cited health plan objective.

What’s standing out is how employers are tackling the challenge. Rather than making sweeping changes to plans or reducing coverage, they’re making targeted moves that help keep spending more predictable.

Among employers planning healthcare cost-reduction initiatives, 35% are increasing employee cost sharing, 31% are expanding voluntary benefits, 28% are sunsetting low-utilization programs, and 24% are considering pharmacy carve-outs. Others are investing in high-performance networks, site-of-care strategies, and additional clinical management programs.

Pharmacy spending has become one of the biggest areas of focus for employers looking to rein in healthcare costs without reducing coverage.

Adoption of utilization management strategies such as prior authorization, step therapy, and quantity limits more than doubled year over year, rising from 24% to 56%. Clinical management of GLP-1 medications for weight loss also increased significantly, rising from 20% to 36%, as employers sought greater oversight of one of the fastest-growing categories of healthcare spend.

Visibility and Control Are Fueling Self-Funding Growth

For many organizations, self-funding provides a clearer view of what’s driving healthcare costs and where intervention may have the biggest impact.

As employers look for more control over healthcare spending, many are turning to self››››-funding and risk-management tools that offer deeper insight into claims, utilization, and cost drivers.

More than half (53%) of employers self-fund medical and pharmacy benefits, up from 36% in 2025. At the same time, employers are strengthening protections against financial risk. Sixty-five percent now carry both individual and aggregate stop-loss coverage, up from 49% a year ago, helping safeguard against high-cost claims, specialty drugs, and emerging gene therapies.

Wellbeing Programs Are Being Held to a Higher Standard

Employers aren’t stepping away from wellbeing programs, but they are taking a closer look at which investments deliver results.

Most employers (69%) report maintaining existing wellbeing programs, while another 28% continue to add new offerings. At the same time, organizations are becoming more disciplined about measuring outcomes and evaluating which programs deliver value.

Utilization tracking has become nearly universal (92%), and employee feedback is now one of the most common measures of program effectiveness (90%).

Employers are also making more deliberate choices about where they invest. Higher-cost benefits such as gym memberships and fitness stipends declined from 44% to 29% year over year, while enhanced employee assistance programs increased from 47% to 56%. Combined with the widespread use of utilization and employee feedback metrics, these trends suggest employers are applying greater scrutiny to wellbeing investments and making more deliberate decisions about where to allocate resources.

Family-Forming Benefits Expand With Clearer Cost Controls

Even as employers expand benefits in some areas, they’re still building clear spending parameters into program design.

Coverage for advanced fertility treatments increased from 62% to 69% year over year, while fertility preservation benefits grew from 44% to 50%.

Many employers are pairing broader access with clearer limits on reimbursement and coverage. Nearly two-thirds (63%) use lifetime maximums for fertility benefits, while 30% use treatment cycle limits. Among employers that offer fertility coverage, most reimbursement maximums remain below $30,000.

The same emphasis on financial guardrails extends beyond fertility benefits. Adoption benefits are offered by 47% of employers and surrogacy benefits by 40%, but reimbursement limits remain common. For both benefit types, lifetime maximums most often fall between $10,000 and $29,999.

See How Your Benefits Strategy Compares to the Market

Knowing where the market is headed can help frame decisions, but the next step is understanding how your program compares Benchmarking your benefits program against similar organizations can help identify opportunities to optimize spend, improve competitiveness, and align your benefits strategy with business goals.

Schedule a complimentary benefits benchmarking consultation with a Sequoia advisor to receive customized insights tailored to your organization.

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.