For employers and HR leaders in California, employee benefits planning is in the midst of an affordability crisis. Rising prices create friction for employers as they try to keep up with trends in employee benefits planning. Many of these trends are driven by evolving compliance requirements and growing employee expectations for more personalized, data-driven care, broader provider access, and expanded benefits for underserved populations.
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In this article, we review the top trends shaping employee benefits planning in California, including how group health insurance solutions can help employers develop more strategic plans that respond to cost and compliance changes more effectively.
Cost Increases Drive Chronic Disease Support
Rising drug costs are fueling insurance premium increases among California employers, according to over 1 in 3 large firms. This includes a rising need for GLP-1 agonists, a class of medication commonly used for weight loss, which is supported by 28% of large California firms.
As the drug-pricing environment becomes more volatile, employers will continue to struggle to offer benefits employees now expect. This may leave many employees feeling underserved by their benefits plans, a major retention factor for as many as half of all employees. Additionally, 9 in 10 employees cite their employer-provided health benefits as their most important perk.
Essential Takeaway
Losing these benefits or imposing coverage restrictions can deter employees from staying in their current positions and even prevent top talent from joining the organization.
Legislative Changes Determine Business Action
In California, many departments enact laws on civil rights, DEI, and accessibility that grant employees certain benefits. Major laws include the California Family Rights Act (CFRA) and the Family and Medical Leave Act (FMLA).
A new law, the California IVF Insurance Mandate, went into effect on January 1, 2026, requiring adjustments to benefit plans to align with new employee rights. The IVF mandate (also known as SB 729) requires employer-provided health plans to include coverage for infertility diagnoses and treatments. This includes fertility preservation services and in vitro fertilization (IVF) with unlimited transfers and up to three retrievals.
This mandate helps cancer patients retain their fertility or have children through other fertilization methods. Research into the impact of cancer, cancer treatments, and other health conditions on reproductive health is growing in importance, and these legally mandated preservation options are a step toward accessibility that employers in California must be prepared to take.
Note: The law broadens the definition of infertility to ensure equitable access for single individuals and LGBTQ+ individuals. Self-funded (ERISA) plans and certain religious employers are generally exempt from the mandate.
Data-Driven Decision-Making is More Accessible Than Ever
Data-driven decision-making is one of the most significant trends in healthcare benefits planning. AI-driven tools have the potential to deliver substantial cost savings for employers. On the administrative side, AI can reduce the time burden of menial tasks like data entry, follow-ups, and feedback pattern recognition. Modern AI-driven software can also deliver faster service than human HR leaders, especially as data collection rates and the need for personalized care increase.
Given the strong emphasis on communication, AI deployment is more logical than ever. Software can translate and simplify content for employees, adjusting the tone, format, and language to suit the target audience. Yet communication is only the beginning as data analytics evolve and provide employers with new insights into employees’ behavior, needs, and care patterns. With proper interpretation and modeling, this vast dataset can inform actionable healthcare benefits planning that keeps California employers ahead of their employees’ expectations.
HR Revenue Planning Moving Forward
Most employers will take steps to incorporate AI into their healthcare planning and development. They may be able to offload their form collection and feedback processes without incurring unnecessary labor costs. This leaves their HR leaders free to focus on what matters: increasing efficiency while supporting their employees’ personalized goals for clearly communicated care.
What Employers Can Do to Improve Their Employee Benefits Strategy
Addressing cost factors effectively begins with transparent communication. Businesses evaluate their benefits packages to make sure they deliver the value employees expect. This includes identifying weaknesses in vendor support that can create coverage gaps.
However, fixing fragmented vendor relationships and addressing pharmaceutical costs is only the first step. To address annual cost increases and stay ahead of trends, employers seek benefits consultants who can create custom group plans for their workforce, allowing them to choose their vendors and take control of their costs.
This personalization has become a trend in California and elsewhere, with over 12 million employees expected to be covered by non-traditional healthcare plans by 2030. Though laws and employee expectations are changing, personalization remains a top priority for both employees and employers in 2026.
Connect with a Top California Employee Benefits Provider
At New City Insurance, our team focuses on the core value of customization to help offset the pressures of rising prices and changing compliance requirements. Customization allows employers to deliver what their workers expect while maintaining transparent cost projections, scalable, data-driven benefits planning, and more stable vendor relationships. Once a custom group plan is in place, employers often see employee engagement improve as well-communicated, customized benefits help employees feel safe and supported.
Contact our team today to schedule a consultation and learn more about the future-proof employee benefits strategies we can provide for your business.