Cost of health insurance expected to exceed $18,500 per employee in 2026, survey shows

The health benefit cost per employee is expected to increase 6.7% in 2026, rising from $17,496 per employee in 2025 to more than $18,500 next year, according to Mercer’s 2025 National Survey of Employer Sponsored Health Plans. This is the highest estimated increase in the last 15 years.

Healthcare costs in 2025 were already up 6% from the previous year, driving concerns about healthcare affordability, the survey says. More than a quarter (28%) of workers with household incomes at or below the average were not confident they could afford healthcare, another Mercer survey revealed.

The increase in cost of prescription drugs is a major contributor to price. In 2025, prescription drug benefit costs rose 9.4% for large employers, classified as having 500 or more employees. This is the highest jump within the last decade. The second highest was recorded in 2023, at an 8.6% increase.

Despite cost concerns, more employers surveyed covered GLP-1 drugs for the treatment of obesity. For example, in 2025, 49% of employers with 500 or more employees covered GLP-1 drugs, an increase from 44% in 2024. There was also a slight increase for employers with 20,000 or more employees—66% provided coverage in 2025, compared with 64% in 2024. The average cost of GLP-1 drugs can be more than $1,000 per patient per month. Obesity is prevalent in the United States too, with 2 in 5 adults considered obese.

The Mercer survey found that employees are attempting several strategies to drive down healthcare costs overall.

“Employers want to minimize increases in paycheck deductions while ensuring employees across all pay levels can afford the care they need when they need it,” Ed Lehman, Mercer’s US Health and Benefits Leader, said in a news release. “It’s a tough challenge, but there are ways that employers can make healthcare more affordable for employees.”

To drive down costs, Lehman said that it’s important that employers offer a variety of plans. For example, in Preferred Provider Organization (PPO) plans, the average monthly cost for employers is $191 for individual coverage, with an average deductible of $1,064. However, in a high-deductible Health Savings Account (HSA) plan, employees pay a monthly average of $109 for a higher deductible of $2,481. In 2025, 67% of large organizations offered three or more medical plans, up from 60% in 2023, the survey shows.

“We expect this trend will continue, as these newer plans tend to cost less and offer more affordable benefits to the plan member,” Tracy Watts, Mercer’s U.S. Leader for Healthcare Policy, said in the news release. “Employers have workforces with diverse needs. When employees choose the right plan for themselves, they can unlock savings.”

Offered plans could also include specialized programs for managing specific health concerns, such as fertility or diabetes. In 2025, 32% of large employers offered a diabetes program, and 23% offered a fertility program, according to the survey.

The survey also shows that the top priorities for employers over the next three to five years are focusing on managing high cost claims (64%), measuring the performance of health programs to ensure they provide value (40%) and making behavioral health care more accessible (27%).

The results of the full survey, which included 2,010 employers, will be published in spring of 2026.