The total health benefit cost per employee is expected to increase by 6.5 percent on average in 2026 — the highest rise since 2010 — even after accounting for planned cost-reduction measures. This is according to a new report by Mercer, a global consulting firm.

Beth Umland, Director of Research, Health at Mercer, and Sunit Patel, Partner and Chief Actuary of the US Health & Benefits Actuarial Financial Group, reported that employers estimated that plan costs would increase by nearly 9 percent, on average, if they took no action to lower costs. 

“Based on projections, 2026 will be the fourth consecutive year of elevated health benefit cost growth following a decade of moderate annual increases averaging only about 3 percent.”

Umland and Patel observed that the survey found 59 percent of employers plan to make cost-cutting changes in 2026 — up from 48 percent in 2025 and 44 percent in 2024. Generally, the authors explained, these involve increasing deductibles and other cost-sharing features, which can lead to higher out-of-pocket costs for plan members when they seek care.

However, they noted that many employers will also seek strategies to slow the growth of costs without passing the costs onto employees.

The projections were based on responses from over 1,700 US employers to Mercer’s 2025 National Survey of Employer-Sponsored Health Plans.