August 3rd, 2026 – A new 2026 Health Trends Report was released by UnitedHealthcare and the numbers tell a clear story: employer health care costs are climbing again, and the drivers behind those increases are shifting in ways that matter to every business owner who offers benefits.
The report draws on claims from UnitedHealthcare’s fully insured and self-funded books of business incurred between November 2024 and October 2025. While the report focuses on larger employers, the underlying trends hit small businesses too, sometimes harder. Here is what stood out to us, and what it means for Colorado employers.
The Big Picture: Spending Keeps Outpacing Inflation
U.S. health care spending reached roughly $5.6 trillion in 2025, with about 30% of that going to hospital services. Hospital prices continue to push premiums and out-of-pocket costs higher for both employers and employees.
The more concerning number is this one: costs tied to catastrophic claims of $100,000 or more rose 12.9% from 2024 to 2025. Employees are experiencing more complex, less predictable care needs, and new treatments are more expensive than ever. Cell, gene and molecular therapies now run anywhere from $370,000 to $4 million per treatment.
Pharmacy Is Eating the Budget
Pharmacy costs rose about 11% in 2025, with similar projections for 2026. A few numbers worth knowing:
- $1 of every $4 in employer health care spending now goes to pharmacy
- Specialty medications made up roughly 55% of total pharmacy benefit spend while accounting for less than 2% of utilization
- Inflammatory conditions accounted for about one-third of specialty drug spend
- Most employers cover GLP-1 medications for diabetes, but only about a third cover them for obesity, and usually with criteria attached
For small groups, this is a reminder that the prescription drug list attached to your plan matters just as much as the deductible. We review drug formularies with every group client for exactly this reason.
The Conditions Driving Costs Higher
Per-member treatment costs rose across nearly every condition category from 2024 to 2025. The biggest year-over-year increases:
- Maternity: up 11.7%, driven largely by NICU stays and fertility treatments
- Mental health: up 10.9%, and up 117% since 2019 as more employees seek care
- Digestive disorders: up 10.5%
- Circulatory conditions: up 9.4%
- Nervous system disorders: up 9.2%
The mental health trend is actually a mixed story. More employees are getting behavioral health support, which is a good thing. The challenge for employers is making sure employees know the full range of resources available, including lower-cost digital and self-help tools when talk therapy is not necessary.
Where Employees Are Getting Care Is Changing
Emergency room visits rose 2.1% in 2025 while virtual visits dropped 16.1%. Younger employees, particularly Gen Z, leaned on the ER more than any other setting while remaining the least likely generation to use primary care. ER visits are among the most expensive and most avoidable ways to receive care. Employee education about where to go for what, urgent care versus ER versus a primary care visit, is one of the cheapest cost-control tools an employer has.
One More Number: Spouses Cost 36% More
Spouses on employer plans generated 36% higher per-member costs than employees themselves, partly because covered spouses average an older age with more health risks. Some larger employers are responding with spousal surcharges, though the report cautions that approach can hurt employee satisfaction. For a small group, the better first step is usually reviewing contribution strategy and plan design before adding surcharges.
What Colorado Small Businesses Can Do About It
The report points to several practical responses, and they align with what we see working for our own group clients:
- Consider copay-driven and lower-cost plan designs. A third of large employers now offer copay-based plans, up from 10% in 2023, because employees understand them and use care more wisely.
- Look at level funded options with stop loss protection. With catastrophic claims rising 12.9% in a year, protecting your bottom line from a single large claim matters more than ever.
- Review your prescription drug list at renewal, not just your premium.
- Educate employees on site of care. Preventing even a handful of unnecessary ER visits helps your renewal.
Bottom line: Costs are rising 8% or more per year, and the drivers, specialty drugs, catastrophic claims and mental health utilization, are not slowing down in 2026. Employers who actively manage plan design, pharmacy and employee education will fare far better at renewal than those who simply accept the increase.
If you are a Colorado business owner reviewing your benefits or offering them for the first time, Colorado Health Insurance Brokers can walk you through fully insured, level funded and PEO options at no cost to you. Request an employer benefits quote.
Source: UnitedHealthcare 2026 Health Trends Report, available at https://www.uhc.com/health-plan-value