This article first appeared in BenefitsPro on January 13, 2026, written by Ann Clifford.
Rising healthcare costs continue to ripple through small and mid-size businesses (SMBs), impacting how they fund, design and communicate employee benefits. As of 2025, the average annual family medical premium for small businesses has reached $26,054, up from $16,977 in 2020 – a 53% increase.
“With continued increases projected for medical spending, small and midsize businesses must find new ways to protect employees and manage costs,” says Chris Nordstrom, assistant vice president of sales for Employee Benefits at The Hartford. “More than ever, benefits advisors play a critical role in helping employers evaluate options and optimize the strategic value of their programs.”
Looking ahead to 2026, three key benefit trends are shaping how advisors and consultants can help SMB clients navigate cost-containment decisions and maximize their employee benefits. These include evaluating the benefits mix, making benefits engagement a year-round priority and embracing technology solutions that help employees and employers alike.
1. Evaluating the Employee Benefits Mix
Nearly 40% of small business owners report that additional premium increases could create severe financial strain, prompting some to scale back benefits or shift more costs to employees.1 Others are moving to less traditional options, such as Individual Coverage Health Reimbursement Arrangements (ICHRAs) and self-funded medical plans.
In tandem with guiding clients through medical cost-containment strategies, advisors can help SMBs minimize the impact on employees and create competitive benefits programs that support recruitment and retention objectives. This opens the door for advisors to spend more time exploring the right mix of supplemental benefits with their clients, according to Nordstrom.
Offering a range of voluntary benefits – from life and disability to accident, critical illness and hospital indemnity insurance – can play a significant role in enhancing employee financial well-being, satisfaction and loyalty without straining the company’s overall benefits budget.2 SMB leaders are receptive. The Hartford’s 2025 Future of Benefits Study found that seven in 10 believe their company should offer additional benefits to be more competitive in the marketplace.3
In addition to voluntary benefits, enhanced mental health and paid medical leave options offer opportunities for SMBs to differentiate their programs and stay competitive in the competition for talent.
“Advisors can help small and midsize businesses stay ahead of trends and requirements, especially with paid leave, where changing regulations require consultant and carrier expertise to ensure compliance,” Nordstrom says.
2. Reinforcing Year-Round Benefits Engagement
When cost pressures are high, unused benefits equal unrealized value. The Hartford’s study found that 74% of SMB employers report that their employees underutilize available benefits and services.3
“Employees often make quick enrollment decisions and move on,” Nordstrom says. “Ongoing and relevant communication keeps the value of benefits top of mind throughout the year.”
Advisors and carrier partners can help employers shift from once-a-year enrollment to ongoing engagement through digital tools, personalized recommendations and short, real-life storytelling that shows how benefits apply to their unique situation. This approach builds greater employer trust, helps boost benefits participation and encourages better company retention – all outcomes that increase the strategic value of benefits.
3. Reimagining the Role of HR and Benefits Technology
With sometimes very limited HR resources, SMBs rely on technology to simplify benefits administration and adoption. As automation and artificial intelligence (AI) capabilities advance, advisors can help clients maximize technology options while maintaining a human touch.
“Technology can simplify administrative processes and provide personalized employee decision support, but it can’t replace empathy,” Nordstrom says. “Employees want to know someone is there when they need help.”
Today, only one in three U.S. workers trust AI to make benefits recommendations.3 For advisors, guiding clients toward carriers whose technology balances efficiency with clear and compassionate support can deliver measurable improvements in cost efficiencies and employee experience.
Looking Ahead
As healthcare cost containment remains a defining challenge, advisors who help clients refine their benefits mix, build year-round engagement and leverage technology effectively will be essential in enabling SMBs to deliver benefits that are valued, competitive and financially sustainable.
Ann Clifford is a freelance writer who translates her background in financial services marketing into specialized content focused on employee benefits and small business.
