Employers Prepare for Largest Health Cost Surge in 15 Years: What You Need to Know

Employers are bracing for a significant rise in healthcare costs in 2026. According to a recent study by Mercer, projected health benefit costs per employee are expected to climb by an average of 6.5%. This marks the largest increase since 2010 and comes after years of relatively stable growth, averaging about 3% annually.

The study surveyed over 1,700 employers in the U.S., revealing that without active measures to curb these expenses, costs could soar by nearly 9%. As healthcare services become more expensive and utilization rises, employers are looking for ways to manage this trend. Both inflation and higher wages in the healthcare sector are adding further pressure on costs.

A growing trend shows that 59% of employers plan to adjust their health plans to mitigate these cost increases—an increase from 48% in 2025. Common strategies include raising deductibles and copays, which could lead to higher out-of-pocket expenses for employees seeking care. However, many employers are also committed to finding solutions that don’t directly shift costs to their staff.

Interestingly, two key strategies have emerged for managing these rising costs: focusing on high-cost claims and measuring program performance for value. Additionally, enhancing access to behavioral healthcare is becoming a priority for many larger employers, with about two-thirds indicating they will emphasize this area.

As health plan costs rise, employees can expect their contributions to increase by approximately 6% to 7% on average. These adjustments are likely to lead to higher overall spending on healthcare, as many employers will raise the deductibles or copays.

The findings from Mercer align with a separate survey from the Business Group on Health, which suggests a median cost increase of around 9% for 2026. More than half of large employers are likely to change their plans to control costs. This includes offering narrower networks or increasing out-of-pocket limits, suggesting a clear shift in how employers are managing healthcare expenses.

Some businesses are exploring innovative options. For instance, 35% of large employers plan to offer variable copay plans, which set upfront copay amounts based on provider fees, thus empowering employees to make cost-effective decisions when choosing care.

In today’s fast-evolving landscape, healthcare costs pose a challenge that requires proactive strategies from employers to ensure they can manage their budgets while still providing necessary benefits. Concerns from employees about rising costs reflect broader societal trends around healthcare access and affordability, making it a crucial topic for discussion in workplaces and beyond.

For more insights on this topic, you can check out related resources from Mercer or the Business Group on Health.



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