Q&A: Navigating benefits for midsize businesses in 2026

Greg Reidy, East Region CEO, and Dave Milich, West Region CEO, for UnitedHealthcare Employer & Individual sat down to chat about the discussions they’ve been having around health benefits and strategies employers are taking to manage their costs going into 2026. Together, they serve small and midsize employers across the country. This typically includes groups with anywhere from 50 to 5,000 employees.

Here’s a peek into their conversation about the challenges and opportunities facing their clients in 2026.

Dave: The key challenge is the rising medical trend. As medical costs continue to rise in 2026, we’re going to see the cost of health benefits go up by probably 10 to 15% or more. Affordability is what everybody is focused on. They’re all trying to find that balance between the cost of providing benefits with their employees’ welfare. But while the challenge is mostly the same across employers, the solutions could vary.

Greg: I totally agree with that. And given the cost escalation, we are seeing the market demand for flexibility on the funding continuum move downstream to smaller employers. We are seeing a fair amount of consultants and brokers push their traditional fully insured customers to consider other alternatives that offer potential cost savings, such as level funded plans, self-funded plans or third-party administrator programs like we offer through UMR, which offer clients more flexibility in their plan design.

Dave: The affordability concerns are definitely causing employers to look at all options, but I think it will ultimately come down to the risk tolerance and current business climate of the company. If you’re an organization who is planning to expand your workforce, enter new geographies or make other strategic decisions to improve your own business, that volatility and uncertainty may make you more inclined to pursue level funded plans, because they provide a known risk level and the potential for a surplus refund if claims are lower than anticipated.¹ Conversely if you think you’re going to be relatively stable in terms of your employee population and your business, you might be more willing to go to a self-funded plan because you don’t see as much volatility.

Greg: Building off of that, we understand employers may not like the premiums they are seeing in the market. However, in a fully insured environment, employers know their total costs and what their ceiling in expenditures will be. Because of the cost increases and trends across the market, we’re seeing alternate funding solutions pitched much more often than they were 5 to 10 years ago — an indication that employers are becoming more willing to trade in the predictability of a fully insured plan for the potential cost savings that a more customizable self-funded plan may offer.

Greg: We have data and insights into many of the interactions people have with the health system. Our ability to synthesize that information into actionable initiatives, processes and policies helps clients and members make more informed decisions, enabling us to drive greater affordability, reduce the cost of care and improve outcomes — offering value to the market regardless as to how an employer may fund their health care program.

Dave: UnitedHealth Group and UnitedHealthcare also have the reputation of being an innovator in the industry, and I think that shows in our product portfolio and the levers we’re able to pull to meet clients’ needs. We’ve got a full continuum of networks and products, and we’re starting to see more employers move along that continuum to find ways to manage their costs, such as selecting more focused network products or tiered plan designs. Surest® is another plan that many employers are gravitating towards because its copay-only plan design can offer members greater cost clarity, which may ultimately lead them to make more appropriate and cost-effective care decisions. The key is that they don’t have to bifurcate their plan and can find the solutions they need within our UnitedHealthcare ecosystem.

Greg: I think that’s because we’re constantly looking at the competitive landscape and asking ourselves, What is needed? What’s missing from the market? How can we solve some of the greatest challenges facing health care today? Because of our financial stability, investment in innovation and reach across the industry, we’re able to bring solutions to market and into our ecosystem rather quickly. We might not always get it right, but we listen and we have a vision of where we want to go and restlessly bring new ideas and solutions to the market. No matter the headwinds or tailwinds, we have a track record of being able to morph and flex to meet the demand and come up with new innovations that not only advance our business, but more importantly, meet the needs of those we are honored to serve.

Dave: Critical to that is our people. I believe we have the best people in the industry who are working each and every day to help people live healthier lives and help make the health system work better — for every client, employee, member and family, no matter what stage of life or health issues they are facing.