India Inc Embraces Smarter Benefits and Preventive Healthcare Amid Talent Race

India Inc Embraces Smarter Benefits and Preventive Healthcare Amid Talent Race

MUMBAI, Feb 26: With health cost trends in India projected to reach 9.9% in 2026, organisations are overhauling benefits strategies, prioritising preventive healthcare, flexible benefits and digital enablement to attract and retain talent, according to the findings from Mercer Marsh Benefits’ Future of Benefits 2026 and Beyond report.

The study draws on perspectives from over 700 organizations, representing more than 3.5 million employees and 8.5 million insured lives across 14 industries. In parallel, the voices of over 82,000 employees were captured across career stages, generations, function and geographies providing a 360-degree understanding of benefit priorities, emerging trade-offs, and the strategic levers organizations must now deploy.

Sanjay Kedia, CEO and President Marsh India said,

“India is at a structural inflection point where regulatory reform, demographic shifts and rising healthcare costs are converging to reshape the employer–employee compact. Benefits are no longer a peripheral HR lever; they are becoming the foundation of workforce resilience, trust and productivity. The message from our data is clear, employers want to care for their people in ways that are compassionate yet financially sustainable, while employees are ready to share responsibility when benefits deliver real value.”

As a result, employers are moving away from fully employer-funded models towards shared funding, smarter plan design and flexible benefits to balance cost pressures with employee value. This shift is already visible: Co-sponsorship of parental insurance premiums has climbed to 29%, from just 4% three years ago, underscoring a growing focus on shared accountability.

The report also reveals organisations are prioritising preventive healthcare to support workforce longevity, with 62% operating a defined wellbeing framework and greater emphasis on early intervention, Outpatient Department (OPD) care and structured wellbeing frameworks. 43% of employers now offer OPD coverage, three-quarters of which are fully sponsored.

42% of organisations now offer health cover between INR 6 lakhs and INR 10 lakhs, while 41% have increased sum insured levels in the past year. At the same time, flexibility and digital enablement are accelerating this shift. One in three organisations has rolled out flexible benefits programmes, while 55% use benefits platforms and 25% are deploying AI-led solutions to manage compensation and benefits.

Commenting on the findings, Prawal Kalita, Managing Director, Mercer Marsh Benefits, India Leader, said,

“The future of employee benefits is increasingly being shaped by digital experience. Employees expect seamless, on-demand access to their benefits, clear navigation during moments of need and personalized guidance across health and wellbeing journeys. What we are seeing is a shift from fragmented platforms to integrated, technology-led ecosystems where data, automation and human support come together to make benefits simpler, more relevant and more impactful.”

The report also highlights the growing influence of Global Capability Centres (GCCs), which are raising benchmarks across the market. One in two GCCs now offers OPD insurance, and one in three has embedded mature flexible benefits models, intensifying competition for skilled talent.

From the employee perspective, expectation is to receive meaningful benefits. While one in three employees still reports limited flexibility, 85% are willing to spend out of pocket for benefits they value, reinforcing demand for more personalised, value-driven designs.

As India’s services economy continues to expand, the Future of Benefits 2026 and Beyond report calls on organisations to reimagine how they support their people, aligning preventive health, flexibility and digital enablement with long-term business resilience.