US Workers’ Health Insurance Costs Set to Rise, Survey Finds

U.S. companies plan to charge more for employee health plans next year, as soaring drug prices drive up insurance costs.

Two thirds of large companies expect to raise monthly premiums for employee health coverage through paycheck deductions in 2027, according to a survey of businesses with at least 500 employees by benefits consultancy Mercer. And about half (48%) of employers say they will make other changes, such as raising deductibles and copays, that will increase how much workers pay out of pocket for care.

It isn’t just employees who will be paying more. Health insurers are raising costs for employers, too, with the cost of group plans set to increase by more than 6% for the fourth year in a row, said Beth Umland, Mercer’s director of research. Annual increases previously hovered around 3% for more than a decade.

Although employers initially tried to absorb those higher costs, they are beginning to pass them onto workers, Umland said. This year, employers expect to pay more than $18,500 per employee for health care benefits, a 6.7% increase from 2025 and the biggest jump in 15 years.

Companies are also looking for ways to cut workers’ costs by offering plans that charge workers less but restrict them to a narrower group of providers.

“Employers are under intense pressure to manage another year of elevated health benefit cost growth, but they also know that affordability matters,” said Simon Camaj, U.S. health leader at Mercer.

How acutely workers feel the price increases will depend on how they use their benefits. Those who utilize robust Preferred Provider Organization plans to frequently visit doctors and fill prescriptions could see their costs rise by as much as 8%, Umland estimates, while those who switch to non-traditional plans might not notice a substantial difference.

In addition to raising premium costs, some companies are also reconsidering their coverage of pricey GLP-1 medications for weight loss. Some 27% of employers tightened the criteria to cover these drugs in 2026 or 2027, according to the Mercer survey, while another 5% are considering dropping them from their plans altogether.