“This means most employers are looking for alternatives to controlling costs without transferring the cost directly to employees,” said Dianne Gavieres, principal at Normandin Beaudry, during a recent webinar by the organization. “One of the ways communication can help reduce the rising cost of benefits is by promoting smart usage of the plans [through things like] educational materials.”
Read: 64% of employers cite cost control as top benefits priority in 2026: report
The survey also found health-care costs are accelerating, from roughly five per cent in 2023 to 10 per cent in 2025. “Our survey gives us important context for these increases,” said Sophie Limoges, principal at Normandin Beaudry, during the webinar. “Employers said one of their biggest challenges with an ageing workforce is the rise in medical care costs and . . . a major contributor to these rising costs is prescription drugs. They continue to represent one of the most significant risks in benefits plans and their impact on plan costs grows every year.”
Having a clear strategy in place will put plan sponsors in the strongest position to realize these savings, she added. “That means [having] strong carrier governance and cost-control tools in place before the generics hit the market. Generic substitution, managed formularies and step therapy are all examples of cost control measures that can be put in place.”
The survey found the No. 2 challenge for employers was managing employee understanding and appreciation (41 per cent). “The first step towards employee understanding and appreciation is to increase visibility of your programs and benefits, as employees can’t value what they don’t know exists,” said Gavieres. “Increasing awareness of available benefits and positioning them as part of the broader employee experience is essential to promoting understanding and appreciation and that includes both monetary and non-monetary rewards.”
She added total rewards statements put the numbers into perspective and can help facilitate conversations between managers and employees to discuss total rewards in a more comprehensive way.
Read: Back to basics on total rewards statements
More than a third (36 per cent) of organizations identified challenges from manual or administrative tasks related to managing benefits plans. “This highlights a critical issue,” said Francis Lemaire, health and benefits consultant at Normandin Beaudry. “Without the right tools and processes in place, administration teams get bogged down in low-value operations at the expense of strategic activities like employee experience and compliance.”
The survey also found economic and geopolitical uncertainty continue to influence employer decision-making. Two in five Canadian employers said the current business environment is increasing pressure on benefits spending, while a quarter said it’s straining the resources available for benefits management and administration.
When it comes to technology, employers reported moving away from basic internal systems, with usage dropping from 21 per cent in 2026 to three per cent over the next five years. When asked about their priorities for technology-driven projects, respondents cited easier navigation of benefits and education (52 per cent), analyzing utilization data (45 per cent), personalized employee communications (45 per cent) and quicker turnaround to answering employee questions (37 per cent).
While the majority of employers reported not using artificial intelligence for benefits administration, a growing share is now starting to use it, signaling a shift from complete inaction to early experimentation, noted Lemaire. “The biggest opportunity [with technology] is reducing manual effort and simplifying administration. It’s about [equipping] teams with the right technology to gain efficiency and deliver a better employee experience.”
Read: 2026 Group Benefits Providers Report: A trio of takes on benefits technology