'Microsoft employees should prepare for 2026 by reviewing upcoming benefit changes and exploring ways to manage rising out-of-pocket health care costs.' - Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'Microsoft employees can better navigate rising health care expenses in 2026 by understanding benefit adjustments early and making informed plan selections,' - Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we’ll examine:

1. Why increasing health care costs are pushing Microsoft employers to pass more expenses onto employees.

2. The approaches companies are using to handle cost pressures, including changes in plan design and pharmacy benefit modifications.

3. How marketplace premium hikes and medical cost trends affect overall health care affordability.

In 2026, Microsoft employees may bear a greater share of health care expenses as costs keep climbing.

Many large U.S. companies, including those such as Microsoft, are preparing to adjust benefit structures to counter rising health care expenses. Mercer’s recent survey of 711 U.S. employers with 500 or more employees found that 51% are “likely” or “very likely” to raise deductibles, coinsurance, or out-of-pocket maximums in 2026—up from 45% in 2025. ¹  

Despite cost-saving actions, employers’ health care costs rose by 4.5% in 2024 and are expected to climb another 5.8% in 2025; absent these actions, Mercer estimates that costs could go up by ~8%. ²  A key contributing factor is the high price of GLP-1 medications for diabetes and weight loss, averaging around $1,000 per patient per month. ¹  The survey also found that 77% of employers rated managing GLP-1 costs as extremely or very important. ¹  Although many companies—including those in the energy sector—have expanded GLP-1 coverage, growing concerns suggest such plans may be untenable by 2026.

Shifting Employer Approaches to Benefits

Previously, employers hesitated to raise deductibles because of tight labor markets and concerns about affordability. Today, with economic uncertainty and slower wage growth, cost management may be taking precedence over hiring and retention efforts in some cases. In 2026, 35% of large firms intend to offer unconventional medical plan options—such as copay-based models aimed at reducing costs while maintaining quality. ¹  Moreover, 61% are evaluating alternatives to traditional pharmacy benefit arrangements to bring more clarity to drug pricing and pharmacy benefit manager (PBM) services. ¹

Rising Costs in the Individual Market

The pressure extends beyond employer-sponsored coverage. The ACA marketplace is slated to experience some of its biggest premium increases in over five years. According to state filings, 2026 premiums could jump dramatically—UnitedHealthcare in New York is seeking increases of up to 66.4%, ³  Arkansas expects an average increase of 36.1%, ⁴  and Florida Blue is looking at 27%. ⁵  If enhanced federal subsidies expire at the end of 2026, millions could be exposed to the full impact of these higher premiums.

Why Costs Are Rising Across the Board

Medical cost trends are projected to increase by 7–10% annually—far exceeding general inflation—driven by factors like brand name medications, hospital services, and specialist care. Regulatory changes are adding further pressure. Insurer earnings also contribute, as several major carriers posted record profits in 2026 while launching multibillion-dollar stock buybacks.

Key Take-Away for Microsoft Workers

With 51% of employers planning to transfer more health care costs onto workers—and ACA premiums rising sharply—2026 may become a critical year for health care affordability. Microsoft employees who familiarize themselves with upcoming benefit changes, optimize HSA/FSA contributions, and choose their 2026 plan with care may offset some of the added costs. Otherwise, households could see thousands in extra spending for equal—or even reduced—coverage.

Dividing retirement assets in a QDRO proceeding requires a clear understanding of what Microsoft offers through its benefit programs. Without a traditional pension, your 401(k) - alongside Social Security - forms the foundation of your retirement income at Microsoft. Microsoft matches 50% of contributions up to the IRS annual limit. Your overall withdrawal strategy, account sequence, and Roth conversion opportunities leading up to and into retirement deserve careful, personalized analysis given the income-sequencing implications.

For healthcare planning purposes, Microsoft offers a high-deductible plan with HSA eligibility. Microsoft also contributes starting at $1,000 annually for corporate employees to eligible employees' HSA accounts, providing an immediate head start on the balance. Because Microsoft does not provide retiree group coverage, building a substantial HSA balance before retirement is one of the most direct ways to prepare for the gap between your last day of work and Medicare eligibility at age 65. COBRA continuation is available for up to 18 months after departure, and marketplace coverage can bridge the remaining gap - having a well-funded HSA provides flexibility for that transition. Integrating all of your Microsoft benefits into one cohesive retirement plan ensures nothing is overlooked and gives you confidence in the path ahead.

Sources:

1.  Mercer. “ U.S. Employers Rethinking Benefit Strategy for 2026 amid Rapidly Rising Costs .”  Mercer Newsroom , 16 July 2026.

2. Fierce Healthcare. ' Mercer survey: Employers may make a return to healthcare cost-shifting strategies ,' by Paige Minemyer. 16 Jul 2026. 

3. New York State Department of Financial Services. ' 2026 Individual and Small Group Requested Rate Actions ,' 2 June 2026. 

4. ACHI. ' Arkansas Insurers File Proposed Rate Increases for 2026 ,' by Chris Ray. 8 Aug. 2026. 

5. Insurance Newsnet. ' Florida Blue among companies proposing double-digit healthcare increases ,' by Christine Sexton. 12 Aug. 2026. 

Other Resources:

1.  Ortaliza, Jared, et al. “How Much and Why ACA Marketplace Premiums Are Going Up in 2026.”  Peterson-KFF Health System Tracker , 6 Aug. 2026.

2.  New York State Department of Financial Services. “2026 Individual and Small Group Requested Rate Actions – Additional Information.”  DFS Prior Approval Portal , accessed 13 Aug. 2026.

3.  Sexton, Christine. “Watch Out for Double-Digit Health Insurance Increases in 2026.”  The Florida Phoenix , 11 Aug. 2026.

4.  Federal Trade Commission.  Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers. Second Interim Staff Report.  14 Jan. 2026. pp. 5–6, 19–20, 32–34.