Navigating Open Enrollment: How Recognition Programs Can Ease the Healthcare Cost Burden

For HR professionals, this creates a delicate situation. You're tasked with maintaining employee morale and engagement during a time when the organization may be unable to fully shield workers from healthcare cost increases. The question becomes: how can you support your employees when traditional levers like enhanced benefits or compensation increases aren't on the table?

While recognition programs can't replace comprehensive benefits or competitive salaries, they can serve as a meaningful supplement, particularly when structured thoughtfully. Points-based recognition programs that allow employees to redeem rewards for health and wellness products offer a practical way to help your workforce manage some of the financial pressures they're facing, demonstrating that the organization is invested in their wellbeing even during challenging times. 

The State of Healthcare for 2026

What's Happening in the Healthcare Landscape

I don’t think this will come to a shock to anyone, but the economic and political landscape going into 2026 is…a bit crazy (to put it mildly). With economic uncertainty and rising costs across the board, the healthcare cost trajectory for 2026 is steeper than many organizations anticipated. Industry forecasts suggest that employer health plan costs are rising at rates that outpace general inflation, with some projections indicating increases of 5-8% or even as high as 10%.  This is concerning because last year, Mercer conducted a survey that reported that 28% of those with household incomes at or below the median were not confident they could afford necessary healthcare.  

The financial implications are staggering. 

Health benefit costs per employee are expected to increase by 6.7% in 2026, rising from $17,496 per employee in 2025 to more than $18,500 next year, representing the highest estimated increase in the last 15 years. To put this in perspective, on a compounded basis, costs in 2026 are likely to be 62% higher than 2017 levels.

Multiple factors are driving these increases. Prescription drug benefit costs rose 9.4% for large employers in 2025, the highest jump within the last decade. The rising use of expensive GLP-1 medications for weight loss has become a major cost driver, with about 80% of employers reporting increased use of GLP-1 drugs. Additionally, cancer remains the top condition driving employer healthcare costs for the fourth year in a row, made worse by growing cancer diagnoses and escalating treatment costs.

What We're Seeing on the Ground 

HR leaders are reporting difficult conversations during benefits enrollment meetings. Though most organizations are looking at new plans that mimic existing costs, those existing costs are already too high. HR leaders are reporting difficult conversations during benefits enrollment meetings. Though most organizations are looking at new plans that mimic existing costs, those existing costs are already too high. These aggregate cost increases translate directly into higher expenses for employees. Workers are likely to pay between 6% to 7% more for their 2026 employer-sponsored health insurance, more than double the current rate of inflation. This means employees could pay about $2,400 for single coverage in an employer-provided PPO, while families would likely face paycheck deductions of $8,900 a year.

But premium increases are only part of the story. 59% of employers will make cost-cutting changes to their plans in 2026, up from 48% making changes in 2025 and 44% in 2024. These changes typically involve raising deductibles and other cost-sharing provisions, which lead to higher out-of-pocket costs when employees seek care.

The situation is particularly acute for lower-income workers. A Mercer survey found that 28% of workers with household incomes at or below the median were not confident they could afford necessary healthcare. Even more concerning, 44% of employees say they couldn't pay $1,000 in out-of-pocket costs, while 19% said they couldn't even afford $500 in healthcare costs, according to the Aflac WorkForces Report. 

The Emotional Toll

Beyond the financial impact, there's an emotional dimension that HR leaders can't ignore. About six in ten Americans say they are at least somewhat worried about affording the cost of healthcare services (62%) or unexpected medical bills (61%) for themselves and their families, according to KFF's May 2025 Health Tracking Poll. These healthcare cost worries now rank higher than concerns about housing, transportation, utilities, and food.

The stress extends directly into the workplace. 50% of employees admitted that financial stress distracts them during the workday, while 84% said financial concerns contribute to exhaustion and burnout. This isn't just an abstract concern, it's affecting how employees engage with healthcare. About one in four adults say they or a family member had problems paying for healthcare in the past 12 months, and one in four adults skipped or postponed healthcare because of cost, with one in five adults not filling a prescription due to cost.

This environment creates real challenges for employee engagement, retention, and overall workplace morale. When employees feel financially stressed, it affects their productivity, their mental health, and their loyalty to the organization. Which is why a staggering 16% cite that pay/benefits is the primary reason why they left their job. The question for HR leaders becomes: what can we do to support our employees when traditional solutions are limited? 

How Recognition Can Help Ease the Burden

Recognition as a Strategic Supplement

Let's be clear from the start: recognition programs are NOT a substitute for competitive compensation or comprehensive benefits packages. Employees need and deserve fair pay and quality healthcare coverage. However, when organizations are constrained in their ability to fully offset healthcare cost increases, recognition programs can serve as a meaningful supplementary strategy that demonstrates organizational commitment to employee wellbeing.

The key is approaching recognition not as a token gesture, but as a strategic tool that genuinely highlights how organizations feel about their teams AND provides tangible value to employees navigating financial pressures. When designed thoughtfully, points-based recognition programs can help employees access health-related resources that might otherwise strain their budgets. 

The Power of Points-Based Recognition

Points-based recognition programs offer particular versatility during periods of economic strain. Unlike traditional recognition that might focus solely on celebratory rewards, modern points programs can be designed to help employees address practical, health-related needs.

Here's how it works: employees earn recognition points through various means, meeting performance goals, demonstrating company values, hitting tenure milestones, or contributing to team success. Instead of redeeming these points only for gift cards or merchandise, employees can access a global rewards marketplace that includes a catalog of health and wellness products that directly support their wellbeing and help them manage healthcare-related expenses. 

Learn More About Points Based Programs Here. 

This approach addresses a critical gap. While employers are working to contain healthcare costs through plan design changes and specialized programs, individual employees still face significant out-of-pocket expenses and health-related purchases that fall outside traditional insurance coverage. Recognition programs can help bridge this gap by providing resources that support preventive health and wellness, potentially reducing the need for more expensive interventions down the line. 

Health-Related Redemption Options That Matter 

The most effective recognition programs for addressing healthcare cost concerns offer redemption options that align with employees' real needs: 

• Preventive Health Tools: Fitness trackers, blood pressure monitors, home health testing kits, and other devices that help employees monitor their health and catch potential issues early, before they become expensive medical problems. For employees managing chronic conditions, having monitoring tools at home can reduce the frequency of doctor visits and help them stay on top of their health between appointments.
• Wellness Equipment: Yoga mats, resistance bands, dumbbells, kettlebells, foam rollers, and other home exercise equipment support physical health and can help prevent costly interventions. For employees dealing with back pain, joint issues, or mobility concerns, having access to proper exercise equipment can reduce the need for physical therapy sessions, pain management appointments, or even surgical interventions. Ergonomic office accessories like standing desk converters, ergonomic keyboards, supportive chairs, and monitor arms help prevent work-related strain and injury. (For example, our very own Marketing Director purchased a squat rack and sauna with his points!)
• Healthy Lifestyle Support: Quality water bottles, meal prep containers, healthy meal delivery service credits, fitness class passes, and meditation app subscriptions that make it easier for employees to maintain healthy habits that can reduce long-term healthcare costs.
• Mental Health and Stress Management: Stress relief tools like journals, aromatherapy diffusers, massage tools, weighted blankets, and subscriptions to mental health apps or online therapy platforms. Given the rising utilization of mental health services and the stress associated with healthcare affordability concerns, these resources address a critical area of need. 

The Psychological Impact

Beyond the practical value, there's an important psychological dimension to this approach. When employees can redeem recognition points for health-related items, it sends a clear message: 

"We see the challenges you're facing, and we want to support your health and wellbeing in concrete ways."  

This type of recognition demonstrates empathy and acknowledges the real pressures employees are experiencing. In an environment where employers believe 72% of employees understand their total out-of-pocket healthcare costs, but only 54% of employees actually do. Recognition programs focused on health provide a tangible, understandable form of support. 

It also empowers employees with choice and control at a time when they may feel they have little of either. Rather than a one-size-fits-all wellness initiative, points-based recognition lets employees select the products and tools that are most relevant to their individual health needs and family situations. 

Creating a Culture of Proactive Health

When implemented thoughtfully, recognition programs tied to health and wellness can also encourage a culture shift toward more proactive health management. Given that employees' concerns about healthcare affordability can lead them to skip or postpone care, with these trends leading to a vicious cycle of missing work and higher healthcare costs due to delayed treatment, anything that encourages preventive health becomes valuable. 

By making preventive health tools accessible through recognition points, you're removing one barrier to employees taking charge of their health. An employee might not purchase a fitness tracker or blood pressure monitor with their limited discretionary income, but when they can obtain it through recognition points, they're more likely to engage with preventive health practices. This shift from reactive to proactive healthcare can benefit both employees and employers over time. 

Consider the potential impact: An employee who receives a blood pressure monitor through their recognition points might discover they have hypertension and seek treatment early, preventing a potential heart attack or stroke. An employee who uses recognition points for fitness equipment might establish an exercise routine that helps them manage their weight, reducing their risk of diabetes and the associated healthcare costs. These preventive measures can potentially help reduce healthcare utilization over time, benefiting both employees and employers. 

Integration with Broader Wellness Strategy

For maximum impact, health-focused recognition should be integrated into a comprehensive wellness strategy. This creates a cohesive approach that addresses employee health from multiple angles:

• Communication and Education: Helping employees understand how preventive health investments can save them money in the long term. Modern recognition platforms allow for Communication “Spotlights” to educate employees on key initiatives and how to best utilize their points. Learn more about Connects Plus and their Spotlights feature here
• Wellness Challenges: Tying recognition points to participation in wellness initiatives, creating positive reinforcement loops
• Manager Training: Ensuring leaders understand how to effectively recognize employees and communicate the health-related redemption options available
• Regular Program Updates: Refreshing the catalog of health-related redemption options based on employee feedback and emerging wellness trends

Measuring Impact

To ensure your recognition program is genuinely helping ease the burden of healthcare costs, consider tracking metrics such as:

• Redemption rates for health-related products versus other reward categories
• Employee feedback on the value and relevance of health reward options
• Participation rates in wellness initiatives tied to recognition
• Employee sentiment during and after open enrollment season
• Overall engagement and retention trends
• This data can help you refine your program and demonstrate its value to organizational leadership. 

Closing

It's important to acknowledge what recognition programs can and cannot do. They won't eliminate the financial burden of rising healthcare costs. They won't replace the need for comprehensive health benefits or competitive wages. But, recognition programs, particularly those offering points-based systems with health and wellness redemption options like Inspirus Connects Plus, can provide meaningful, practical support at a time when employees need it most. 

As we navigate the challenging landscape of rising healthcare costs and economic uncertainty, HR leaders need every tool available to support employee wellbeing and maintain engagement. Open enrollment 2026 may bring difficult conversations, but it also presents an opportunity to demonstrate organizational commitment to your workforce in tangible ways. 

By thoughtfully designing recognition programs that acknowledge the health-related financial pressures your employees face, you're doing more than just offering rewards. You're demonstrating empathy, providing resources that support proactive health management, and showing your workforce that their wellbeing matters, even when economic realities limit other forms of support.

As you prepare for open enrollment conversations and plan for the year ahead, consider how your recognition strategy can evolve to meet this moment. Your employees are navigating genuine financial stress around healthcare costs. A recognition program that addresses their real needs can be a powerful way to stand beside them during a difficult time. 

The organizations that will thrive in this environment are those that find creative, empathetic ways to support their people through multiple channels. Recognition focused on health and wellness is one such channel, and for many employees facing rising healthcare costs, it could make a real difference in their daily lives and long-term wellbeing.