Dive Brief:
- Average healthcare costs are projected to reach more than $19,000 per employee in 2027, an increase of 9.5% year over year, according to a new study from professional services firm Aon.
- While employers now absorb more than 80% of health plan costs, employees are affected, per the study. In 2026, employees will likely pay an average of $5,297 for coverage, up 7.9% from 2025. That cost includes a 6.4% year-over-year rise in payroll contributions (to $3,130) and a 10.2% rise in out-of-pocket expenses (to $2,167).
- The study attributed a rise in out-of-pocket expenses to “the increased utilization of health care services, as well as the enrollment in leaner plan options.” In addition, some instances of higher medical billing have been attributed to the adoption of technologies such as artificial intelligence that “support more detailed clinical documentation and coding.”
Dive Insight:
This is the fourth consecutive year that increased healthcare costs have approached double digits, the study said, adding that this trend has extended “one of the most sustained periods of health care inflation employers have faced in decades.”
Medical spending is up for a variety of reasons, including an uptick in the prevalence of chronic conditions, which has led to more high-cost claims, the study said. Meanwhile, prescription drugs are a factor as more people rely on specialty medications and adopt GLP-1 therapies, leaving employers to weigh healthcare access against affordability and long-term sustainability.
“At this level, rising health care costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities,” Mike Pasterick, North America health solutions leader for Aon, said in a statement. “Leaders are undergoing pressure to maintain affordable benefits while continuing to invest in attracting, supporting and retaining talent.”
The cost increases for employer healthcare have more than doubled over the last few years, rising from 3.7% in 2022 to 8.8% in 2026.
“The organizations best positioned for the future will be those that can proactively identify emerging risks and take targeted action before costs escalate,” Debbie Ashford, North America chief actuary of health solutions for Aon, said in a statement.
As healthcare costs rise, almost half of U.S. employers with 500 or more employees said they will be shifting their 2027 plan offerings so that workers will be responsible for more costs, according to a recent report from Mercer.
At the same time, 83% of employers said increased healthcare costs will force them to make tradeoffs with wage and salary increases, according to a survey conducted by the National Alliance of Healthcare Purchaser Coalitions.