Controlling Employer Healthcare Costs is Sponsors’ Top Strategic Priority for 2027

Employers are gearing up for the biggest healthcare cost spike in 20 years, and in doing so, are shifting priorities, according to the 2027 Brown & Brown Employer Health and Benefits Strategy Survey, released today.

Headed into next year, 44% of employer respondents cited controlling health care costs for their organization as their top objective, the second consecutive year that priority landed in the top spot. While the share of employers naming their healthcare costs as their chief priority rose 2 percentage points from a year ago, the proportion that ranked controlling health benefit costs for employees as most important fell to 39% from 42% in 2025, dropping one spot on that list.

At the same time, the share of employers that named “attracting and retaining a competitive workforce” as their No. 1 priority dipped to 33% this year, down from 37% in 2025. The share prioritizing “increasing workforce engagement and productivity” fell to 28% from 32% last year.

“If this year’s survey had a front page, ‘costs take center stage’ would be the headline,” says Chana Bieker, senior vice president at Brown & Brown Inc. However, “when we talk about organizational costs, employee costs and recruitment of talent, all of them matter at once, and [employers] can’t trade any one of them away.”

Bieker says the decision employers are facing is not “whether to act” on organizational costs, but “how to act without breaking the other two sides of that equation.”

Cost Containment Strategies

Next year, employers are planning to focus their cost containment strategies on improving efficiency and extracting more value from their existing benefits, according to the report on the survey.

Employers identified their top five cost containment strategies for 2027 as:

1. Performing claims, pharmacy or clinical audits, with 83% already doing so or planning to do so next year;
2. Evaluating transparent pharmacy benefit managers or pricing models, also at 83%;
3. Developing stronger data analytics to measure the success of benefit and point solutions, again at 83%;
4. Evaluating medical stop-loss plan design, at 82%; and
5. Conducting a medical and/or pharmacy benefits request for proposal, also at 82%.

Pharmacy plans remain one of employers’ largest cost drivers. When asked about their top concerns and challenges related to administering pharmacy benefits, employers most often cited managing overall pharmacy cost trends (46%), affording medications for members and the plan (43%) and developing a strategy for providing specialty and high-cost drugs (35%).

Employers’ frequently cited approaches to containing pharmacy costs included leveraging site-of-care management for specialty drugs under a medical benefit, PBM transparency programs and exclusive specialty pharmacies.

PBMs are third-party administrators that manage prescription drug benefits for health insurers, employers and government programs and act as intermediaries between drug manufacturers and insurers.  While they have faced regulatory scrutiny for allegedly squeezing pharmacies during negotiations and inflating drug costs, some employers may now have more transparency into them. In October, the Department of Labor announced a final rule under the Employee Retirement Income Security Act that requires PBMs to make detailed disclosures to fiduciaries of large, employer-sponsored, self-insured group health plans to satisfy ERISA’s statutory prohibited transaction exemption for service arrangements.

GLP-1 Cost Containment as a Balancing Act

Employee demand for glucagon-like peptide medications shows no signs of abating, remaining a key consideration for employers hoping to contain prescription costs.

Nearly half (45%) of employers said they cover GLP-1 medications for weight loss, down 3 percentage points from last year. However, nearly all (96%) employers who cover GLP-1 medications said they plan to continue offering coverage for weight loss  the next one to two years, up from 89% in 2025.

Coverage comes with boundaries, however: 77% of employers set restrictions on coverage for weight loss, up 14 percentage points over a year ago.

“It’s the guardrails, not the exits,” Bieker says. Employers are giving eligibility for GLP-1 coverage “more teeth.”

In addition to prior authorizations, 45% of respondents said their participants must meet certain clinical criteria above and beyond U.S. Food and Drug Administration guidelines to qualify for coverage of the medications for weight loss; 43% said coverage is limited to specific GLP-1 products on a formulary and 33% said participation in a lifestyle or behavior management program is required to have the drug’s cost covered.

Bieker says she has also heard some employers in higher-turnover industries are requiring employees to work for the company at least one year before they are eligible to fill a prescription for a GLP-1 medication. Employers “want to make sure that talent is invested in them as a company, not just [in] their benefit program,” she says.

Another approach Bieker says she has seen employers use is to offer a fixed dollar amount through a health reimbursement arrangement, “keeping access [for] employees but capping the employer spend side.”

In a recent interview, Chris Byrd, senior vice president of health and benefits at Wex Inc., a company that provides employee benefits software and payment solutions, said the “selling point” of an HRA for GLP-1 medications is that employees might be able to obtain the drugs at lower prices on the open market than what the employer would be charged by a pharmacy benefit manager and in turn charge through health insurance. He says that the concept of an HRA for GLP-1 medications is relatively new, so he would think adoption has been modest—yet growing—to date.

 The Brown & Brown survey is based on responses from 998 employers with at least 200 U.S.-based employees. It was conducted from July 21 to August 28.