For CFOs and HR leaders who don't have time for filler. A monthly read on the regulatory shifts, market moves, and money on the table.
Mercer's final 2025 survey is in: $18,500 per employee, 6.7% increase, the highest in 15 years. Boards are noticing. The question isn't "why is it high" — it's "what are we doing that peers aren't?" Three defensible answers separate above-average performers from below.
Here's the math that changes the conversation. At $18,500 per employee, a 250-person self-funded employer is spending $4.6 million a year on health benefits — before pharmacy, stop-loss premiums, or administrative fees. Compound growth at 6.7% means that number becomes $6.4M by 2030 with no plan design changes. Benefits is now the second-largest operating expense after payroll for most mid-market employers. That's the shift boards are noticing. And the September question every CFO is being asked is the same: what are we doing about it that others aren't?
Five months of coverage in this brief now synthesize into one CFO answer. These are the three levers separating above-average and below-average cost performers in 2026 — and the ones your board will want to hear you name. None of them require asking employees to give something up. All three protect the plan by fixing structural inefficiency, not shifting cost.
The same infused cancer drug costs an average of 86% more at a hospital outpatient department than at a physician office (EBRI). Some specific drugs run 128% or 428% higher. Cancer is now the #1 employer cost driver, and early-onset cancer means it's hitting working-age employees — on your plan, not Medicare's. The defense: pull infused drug spend split by site-of-care, then route through physician offices, ambulatory infusion centers, or home infusion where clinically appropriate. Documented savings: 25–30% per episode. Covered in our July issue.
The Stern v. JPMorgan ruling (March 2026) confirmed that PBM prohibited-transaction claims survive dismissal where fiduciary-breach claims don't. The plaintiffs' bar has a working template. Every self-funded plan should have on file: (1) a review of PBM compensation structure, (2) documentation that a party-in-interest analysis was performed, (3) benchmark data showing PBM terms are reasonable. The audit itself protects the plan — even if you find nothing wrong. Not having documentation is the exposure. Covered in our May and June issues.
2027 stop-loss renewals are landing at 30% baseline, 50% at the outlier. Carrier loss ratios hit 8-year highs in 2024. The captive question stopped being about lower premium and became about ending the volatility. For employers on their fourth consecutive year of double-digit increases, the trade looks different. Captive underwriting windows close well before January 1 renewals. The September question isn't "should we go captive" — it's "is the option still open?" Covered in our June and August issues.
The pattern across all three: the defense is structural, not incremental. Cost-shifting to employees works once, at renewal, and creates HR problems the following quarter. Structural changes to plan design, PBM contracting, and risk vehicle work every year without asking employees for anything. That is the answer boards want to hear.
The Gag Clause Prohibition Compliance Attestation is required annually of every group health plan. Most sponsors treat it as a checkbox. It's a sworn attestation, filed with three federal agencies, that your plan contracts are free of prohibited language — and most sponsors are attesting without ever reading the underlying contracts.
The CAA gag clause prohibition bars plan contracts from restricting access to provider-specific cost and quality data. Most sponsors sign the attestation based on TPA assurance and never audit the underlying language. What changed in 2026: some TPAs, including MedCost, have announced they will no longer file on behalf of plan sponsors. Filing directly means the sponsor's signature is on the attestation. If the underlying contracts contain gag language, the attestation is false.
The "hidden gag" is the real problem. Most primary TPA and carrier contracts have been cleaned up. But downstream agreements — between your TPA and a network, between your PBM and its rebate aggregator, between any vendor and a subcontractor — are where restrictive language now lives. The plan sponsor's attestation covers those too. If your TPA can't produce clean confirmation across the entire downstream chain, your attestation is being signed on faith.
IRS Revenue Procedure 2026-26 set the 2027 ACA affordability percentage at 10.22% — the highest since the ACA was enacted. For calendar-year plans, employee contribution rates lock in during October. The math you use this month decides your 2027 pay-or-play exposure.
The 10.22% number sounds like a technical adjustment. It isn't. Employers can now charge employees a higher share of premium and still meet the affordability safe harbor — but that collides with a workforce whose marketplace fallback disappeared when enhanced ACA subsidies expired in January 2026. If you raise contributions to the 10.22% limit, you capture savings and you also capture participation.
Three open loops from last issue. One is progressing quietly. One is quieter than expected. One took a small but consequential turn.
Post-January 2026 enforcement-priority declaration, EBSA investigators are including cybersecurity documentation requests in routine health plan audits — not as standalone actions yet, but as part of broader fiduciary reviews. The audit posture is testing whether committees have documented their vendor cybersecurity evaluations. If you sent the DOL 12-question checklist to your TPA as recommended last month, the responses are your file. If you did not, that's the September task that still matters.
Vanguard's August announcement of $1,500 per employee has not yet triggered the wave of Fortune 500 follow-on commitments some expected. Treasury guidance (REG-101355-26) remains in comment period. Most mid-market employers are appropriately parked in "evaluating, not committing" mode. The recommendation from August stands: draft your one-page internal position now, even if the position is "not yet." The board question is still coming. Adoption pressure will build if two or three peers in your industry announce before Q1.
Early September renewal quotes are showing carriers pushing lasers more aggressively than last cycle — including on claimants who would not have been lasered in 2025. The pattern: carriers are absorbing more base-rate volatility by transferring individual-claimant risk back to the plan sponsor via lasers. If your renewal quote comes back with a lower-than-feared base rate but new lasers attached, that's the same pricing dressed differently. Ask for the no-new-laser number in writing, even if you don't take it. Knowing the gap changes the negotiation.
Not yet ready for full coverage. Each one will shape someone's 2027 renewal — and the employers who see them coming get the cheaper outcome.
The July 22 proposed rule would let health plans use a notice-and-access model — posting required documents online with electronic notification — as a safe harbor for ERISA disclosure. The current 2002 rule was written before smartphones. The proposal is narrow (health plans only, not stand-alone dental or life), but the operational lift savings are real. Comments close September 21. If your benefits administration platform can support notice-and-access, this rule matters. Watch for the final version in Q1 2027.
New Jersey Family Leave Act amendments broadened definitions of "family member" and modified employer size thresholds. For multistate employers with New Jersey employees, existing leave administration workflows may not capture the new coverage triggers. The compliance risk is quiet: private right of action for aggrieved employees. Confirm with your leave administration vendor that policies have been updated for the July effective date — in writing.
In August, the Eighth Circuit affirmed dismissal of a participant class action against Caremark, holding ERISA preempts Arkansas's pharmacy network adequacy requirements. The ruling narrows the state-law path to challenging PBM practices in ERISA-covered plans. It does not affect the federal §406 theory that survived in Stern v. JPMorgan — that path stays open.
At $18,500 per employee, the board question is coming. Name your three structural levers — site-of-care routing, PBM contract review, stop-loss vehicle. Have the dollar impact and timeline for each. "Costs are up everywhere" is not a defense.
Send one written request to your TPA, PBM, and network managers requiring confirmation of no downstream gag clauses. Whoever files the attestation, the plan sponsor bears the risk. Do not sign what you have not verified.
ACA affordability at 10.22% plus the subsidy cliff means workers you'd expect to marketplace-shop will stay on your plan. Model contribution scenarios with participation shifts, not in isolation. The savings on paper can be smaller than the risk in practice.
No sales pitch. No pressure. Just an honest conversation about where your benefits strategy stands — and where it could go.
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The Benefits Brief · September 2026 · Hotchkiss Insurance
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The Benefits Brief · Tess McCoy · Hotchkiss Insurance · Houston, Texas