US workers are likely to pay more for employer-sponsored health insurance in 2027. Large companies are preparing to pass more healthcare costs on to staff. This follows another year of rising medical inflation and prescription drug costs.
A Mercer survey of companies with at least 500 employees found that two-thirds of large employers expect to raise monthly health insurance premiums in 2027. These increases would be collected through payroll deductions.
Nearly half of employers also plan other changes that could raise workers’ out-of-pocket healthcare costs. These may include higher deductibles, copayments and other cost-sharing measures.
The findings suggest that healthcare affordability will remain a major workplace issue. Employers are trying to control benefit spending. At the same time, they are under pressure to keep employee coverage affordable.
Employer Healthcare Costs See Biggest Jump In 15 Years
Employers are facing another year of steep healthcare cost growth.
Group health plan costs are projected to rise by more than 6% for the fourth year in a row. This marks a sharp shift from the previous decade, when annual increases were usually closer to 3%.
Employers expect to spend more than $18,500 per employee on healthcare benefits this year. That represents a 6.7% increase from 2025. Mercer said this would be the largest increase in 15 years.
Beth Umland, Mercer’s director of research, said many employers initially tried to absorb higher costs. They avoided shifting the full burden to workers. However, several years of elevated increases have changed that position.
Many companies are now preparing to raise employee contributions. Health insurers are also lifting group plan costs, adding more pressure across the employer-sponsored health insurance market.
Simon Camaj, Mercer’s US health leader, said employers are under intense pressure to manage another year of high health benefit cost growth. He also noted that affordability remains important.
Employer Health Insurance Costs Add Pressure From GLP-1 Drugs
Prescription drug costs are a major driver of the increases.
Employers are watching the rising demand for GLP-1 medications. These drugs are used to treat diabetes. They are also increasingly used for weight loss.
Their high cost and growing popularity have raised concerns for health plans. Employers that continue to cover GLP-1 weight-loss drugs may impose stricter rules.
According to Mercer, 27% of employers tightened coverage criteria for GLP-1 weight-loss drugs in 2026 or 2027. Another 5% are considering dropping coverage altogether.
Possible controls include prior authorisation, stricter eligibility rules and clinical criteria. These measures aim to limit unnecessary spending while preserving access for patients with clear medical needs.
Narrower Provider Networks May Lower Premiums
Some companies are also considering lower-cost plan options.
These plans may reduce monthly premiums by limiting workers to narrower provider networks. Employees may pay less each month, but they could have fewer choices of doctors, hospitals and specialists.
The effect on workers will depend on the plans they choose. It will also depend on how often they use healthcare services.
Employees in more comprehensive Preferred Provider Organisation plans may face larger increases. Those who regularly visit doctors or fill prescriptions could see costs rise by up to 8%, according to Umland.
Workers who move to narrower-network or non-traditional plans may see smaller premium increases. However, they may face reduced provider choice.
The Mercer findings show that Employer Health Insurance Costs remain a growing challenge for US companies and their staff. In 2027, both sides are likely to feel the pressure of medical inflation, higher prescription drug spending and tighter benefit design.
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