Benefits strategy is becoming harder to establish through a purely financial lens. Costs are still rising, but employees are also placing more weight on whether benefits feel relevant, dependable and easy to use.
This is creating bigger questions for plan sponsors: are benefits still delivering value for employees — and in ways employers can afford?
As such, the Canadian group benefits market is moving into a different phase. Value is no longer determined by how much coverage is offered. It’s now valued by whether programs reflect what employees care about most and how well they hold up under pressure.
This is reinforced by recent employee sentiment, which shows benefits moving closer to the center of the employment relationship. This has a growing influence on attraction, retention and workforce stability. More employees now point to benefits as a meaningful factor in both joining and staying with an employer. Core benefits, including health coverage, are becoming more important indicators of perceived value.
Simultaneously, cost pressure isn't receding in any durable way. Across Canada, pressure remains concentrated in pharmacy and paramedical services, with expected trends to remain elevated over the next two years.
That combination is pushing organizations to revisit not only how benefits are designed, but what is the intended value of the benefits.
Benefits as a more effective retention lever
A persistent pattern in employee sentiment is the growing importance placed on the quality of the benefits offering.
Compensation still anchors most employment decisions, but benefits matter more than ever for attraction and retention.
That's not a passing trend. Benefits are no longer just part of the standard package. They’re directly impacting retention within the broader employee value proposition.
For employers, that cuts both ways. Strong, well-communicated programs can reinforce loyalty and stability. But plans that feel dated, hard to use, or out of step with employee needs may increasingly work against those same goals.
Employees are reasserting the importance of core health coverage
This latest employee research also points to something more grounded: even as expectations evolve around flexibility, personalization and digital enablement, core health coverage still sits at the center of the perceived value of benefits.
In the 2026 Global Benefits Attitudes Survey for Canada, core benefits remain central to how employees assess the value of the employment deal, particularly in a period of economic uncertainty and growing healthcare needs.
Simultaneously, importance should not be mistaken for satisfaction. Many employees also want improvements to core programs, with health insurance ranking among the leading areas where employers are expected to do more. That distinction matters. Employees aren't just saying that health benefits matter. They’re also indicating that current programs may not always be keeping pace with expectations around access, affordability and importance.
The findings also point to a broader set of employee priorities beneath the surface. Employees are looking for benefits that do more than provide coverage. They want programs that are easier to understand, easier to access and better aligned with the pressures they face across health, financial wellbeing and work-life stability. Core benefits remain the anchor, but their perceived value is increasingly shaped by the overall experience around them, including choice, digital access, effective communication and support.
A cost environment that shows little sign of easing
There was some breathing room in 2025. Healthcare trend eased, dental increases became more manageable and disability results weren't as severe as many had expected. After several years of sharper increases, the market finally appeared to settle somewhat.
Even so, the underlying pressures haven't really gone away. Across health benefits, upward pressure remains tied to many of the same areas that have driven recent strain: specialty drugs, rare diseases, GLP-1 therapies, rising mental health issues and broader paramedical use. Dental costs look more stable, but not resolved, while disability is again showing signs of pressure as incidence and claim complexity remain elevated.
So while 2025 may have felt more manageable, it may end up looking more like a pause than a reset. For plan sponsors, the more plausible outlook is that cost pressure continues — and could begin to build again through 2026 and 2027.
Looking ahead
For plan sponsors, benefit reviews are never truly finished, and the next cycle will demand greater selectivity in what they choose to offer.
Employees still value core health-related benefits, but they also expect those programs to feel current and usable, not just available. This will be more challenging if cost pressure begins to rise again.
The task, then, isn't simply to maintain a competitive benefits package on paper. It is to make practical decisions about where benefit dollars are doing the most work, where current design may be falling short and where a more disciplined approach may be needed.
For many organizations, that may mean doing fewer things — but doing the right things more clearly and more deliberately.
Author
