More than half of employers are now using cost-sharing arrangements to manage escalating health benefit expenses, while large organisations are increasingly turning to captive insurance structures for greater cost control, according to new research from Howden Employee Benefits. The broker's Global Employee Health Report 2026 reveals that 54 per cent of employers have adopted cost-sharing models, where employees contribute a portion of their treatment costs. However, larger organisations are going further by establishing captives, which allow them to insure their own health risks directly and maintain tighter control over both costs and claims. The shift comes as global medical inflation is projected to hit 10.6 per cent in 2026, with 93 per cent of employers expecting health benefit costs to rise again this year. The report surveyed 442 employers and 1,460 employees across 13 countries in Asia, Europe, the Middle East, Latin America and the Pacific. Regional variations are significant, with medical trend rates highest in Asia at 13.5 per cent, followed by the Middle East at 12.5 per cent and the UK at 12 per cent. Europe faces an 8.5 per cent increase, while the Pacific region expects the lowest rate at 7.8 per cent. The research highlights a growing disconnect between employer spending and employee satisfaction. While 90 per cent of employers believe their health plans meet employee needs, 25 per cent of employees disagree that their employer supports their wellbeing. Access delays are driving employees to pay out of pocket despite having coverage. Only 57 per cent of employees began treatment within a week of diagnosis, and 36 per cent reported their condition worsened due to delays. Notably, 41 per cent paid for private care themselves because waiting times were too long, even though they had employer-provided insurance. The emergence of expensive new treatments is adding pressure. Some 65 per cent of employers cite growing demand for GLP-1 drugs like Ozempic as a cost concern, with 53 per cent expecting diabetes and obesity-related drug prices to increase by 5 to 25 per cent in 2026. Mental health remains the top health-related risk for 2026 and the biggest driver of benefit costs, according to employers. Some 49 per cent of employees sought support for depression, anxiety or stress in the past year, yet 16 per cent remain uncomfortable using employer-provided mental health services due to privacy concerns and fear of career repercussions. The report also reveals a dramatic shift away from public healthcare systems. More than half of employees now rely solely on private care for serious treatments, with a further 28 per cent using a mix of public and private services. Howden recommends that employers explore alternative funding models, including captives, to maintain cost stability while improving access and outcomes. The Howden Employee Benefits Global Employee Health Report 2026 is available at: https://www.howdengroup.com/uk-en/howden-employee-benefits-global-employee-health-report
