The Benefits Reset: Why 2026 Demands a New Approach to Employee Health
With sickness absence up and PMI premiums inflating, employers are rethinking benefits. The next decade belongs to prevention, personalisation and data-led decisions.
The tipping point for UK employers
Sickness absence has surged to 9.4 days per employee in the last 12 months, up from 7.8 days in 2023 - a stark rise that’s now pressuring budgets and productivity alike.
On the financing side, UK private medical insurance (PMI) costs were projected to rise by c. 12.6% in 2024, outpacing global and European averages. That trend has carried into 2025 renewal conversations for many employers.
Meanwhile, the government-commissioned Keep Britain Working review puts a number on the productivity drag: £85bn a year in lost output and employer costs linked to ill health. This isn’t a “nice-to-have” issue - it’s a material business risk.
The bottom line is that the old model - pay more every year to treat problems after they arise - is no longer sustainable for businesses or society.
From reactive to predictive: a smarter benefits model
Traditional benefits packages have tended to prioritise treatment (PMI, EAPs, cash plans) with limited visibility of where risks are building. The shift underway is to predictive wellbeing - using data to identify risk early and intervene before issues become high-cost claims.
Predictive analytics help HR leaders see emerging health risks in their population and act sooner, guiding targeted screening and prevention rather than blanket, low-yield initiatives.
Prevention potential is real: many chronic conditions are preventable through modifiable risk factors (e.g., smoking, alcohol, obesity, inactivity). Focus your spend there and you reduce downstream cost.
How Klarity fits: Klarity’s AI-driven approach useshundreds of millions of clinical data points (validated with global organisations) to predict risk across major cancers and chronic conditions - then guides employees to appropriate, risk-based screening and next steps.
ISIO, Head of Wellbeing, Steve Thomson comments
“We’re seeing a decisive shift from reactive claims management to proactive, data-led prevention. Clients who combine risk insights with targeted benefits offerings are better at managing cost trends while supporting workforce resilience.”
Why the status quo underperforms
Costs rise faster than value: PMI inflation and increased claims put upward pressure on premiums, even as many programmes struggle to evidence outcomes.
Wellbeing isn’t cutting through: despite increased employer focus, UK absence continues to climb - signalling a gap between investment and impact.
Misaligned priorities: employers often invest heavily in areas that aren’t employees’ top concern, blunting engagement and ROI.
The direction of travel is clear: benefits that measure, predict and personalise will outperform benefits that generalise and hope.
What ‘good’ looks like in 2026
1.
Data-first discovery: start with a confidential, population-level risk assessment to surface the biggest health drivers in your workforce and to prioritise action. (Analytics and wellbeing reporting are now mainstream advisory capabilities.)
2.
Targeted benefits, not blanket offers: move from blanket criteria to risk-stratified strategy. Earlier detection improves outcomes dramatically and helps avoid expensive late-stage pathways.
3.
Prevention embedded in strategy: chronic conditions drive much of the long-term burden - but are often preventable through modifiable risks. Build programmes around that reality.
4.
Measure impact: track absence, claims trends, and utilisation; iterate regularly.
Proof of engagement: One Klarity client achieved64% employee participation in six weeks with a personalised cancer risk assessment plus a targeted cancer screening pathway.
Steve Thomson from ISIO continues, “This isn't resilience just as a wellbeing metric, but as a workplace performance driver too. Healthier teams deliver more consistently, with stronger engagement and higher levels of productivity. That’s not a nice-to-have, it’s a competitive edge.”
Book a FREE demo today
Book a Klarity Risk Assessment demo today to understand how early detection and predictive insight can transform wellbeing outcomes and financial performance.
