Economic uncertainty and escalating medical expenses are deepening financial stress for US employees and taking a toll on their mental health, according to Prudential Financial's latest Benefits & Beyond study.
The research suggested financial pressure is no longer just a budgeting issue. It is increasingly tied to mental strain and health decisions in ways that can undermine engagement and productivity.
At the same time, Prudential highlighted a clear perception gap: while 75% of employers believe they are doing enough to help employees manage medical costs, only 46% of employees agree.
The findings, drawn from the first of three installments in Prudential’s 2026 Benefits & Beyond study, “The Future of Work: Building financial resilience in an era of rising costs,” come as employer health costs and employee out-of-pocket expenses are both expected to climb faster than general inflation through 2026, according to benefits consultants and healthcare analysts.
According to Prudential, 68% of employees experienced at least some financial stress in the past 12 months, and 28% said it was a significant or overwhelming concern. For many, that pressure is feeding directly into mental and emotional strain: 45% of employees report experiencing more mental stress over the past year due to financial concerns, rising to 50% among Gen Z.
The study reinforced a pattent seen across other workplace surveys - workers who are struggling financially are more likely to report poorer mental health, changes in health behaviors and difficulty focusing at work. This raises concerns around absenteeism and retention at a time when labor markets remain tight in many sectors and voluntary benefits have become a key tool for attracting and keeping talent.
“Rising medical costs are putting pressure on employers and employees alike, intensifying financial stress across the workforce,” said Jon Trevisan, vice president and head of distribution at Prudential Group Insurance. “The most successful organizations will likely take a holistic approach that balances managing costs with delivering meaningful benefits that support overall employee financial health.”
Prudential’s data showed that seven in 10 employees saw at least a 5% increase in their medical costs over the past year, and nearly one in five experienced hikes of 15% or more. Those increases are not only squeezing household budgets; they are also influencing how people use care.
Employees said rising medical expenses significantly affect their financial stress, mental health and physical health. Other industry research suggested that cost concerns are leading a growing share of Americans to delay or skip care, including doctor visits, prescriptions and recommended tests, which can increase long-term health risks and future claim costs for employers and insurers.
Against that backdrop, the disconnect between employer intentions and employee perceptions is notable. While most employers in the study believe they are doing enough to help manage medical costs, fewer than half of employees agree, raising questions about whether plan design, cost-sharing structures or communication – or a combination of all three – are failing to meet workers’ needs.
The report also pointed to limited use of existing support. Only 13% of employees said they turn to employer resources for help with financial, medical or mental health challenges, despite employers’ efforts in recent years to expand benefits and well-being offerings.
“This research points to a critical opportunity for employers,” said Michael Estep, president of Prudential Group Insurance. “Connecting financial, medical and mental health support through clear, ongoing communication and education helps employees better understand their benefits and feel supported when they need it most.”
