Mercer's Final Survey Projects US Employer Health Costs Rising 6.7% in 2026 to Above $18,500 Per Employee, the Largest Jump in 15 Years, With Drug Spending Up 9.4% at Large Employers

Mercer, the benefits consultancy, has published the final results of its 2025 National Survey of Employer-Sponsored Health Plans. It projects that the average total health benefit cost per US employee will rise 6.7% in 2026, to above $18,500. An earlier, preliminary release in September 2025 had projected 6.5%. This article explains both releases, what the survey measures and what it does not. The 2026 figures are projections made in 2025, so they are not a measure of what employers actually spent in 2026, and the sources reviewed do not report actual 2026 outcomes.

The survey

The final survey covers 2,010 employers, weighted to represent US health plan sponsors with 50 or more employees. It was fielded from June 10 to August 15, 2025, and this was the 40th year of the survey. The preliminary release, issued on September 4, 2025, was based on over 1,700 employers, with responses counted through August 12, 2025. The difference between the 6.5% and 6.7% figures therefore reflects a larger, later set of responses, and this article does not offer another explanation.

The cost figures

Mercer reports the average employer-sponsored health insurance cost in 2025 at $17,496 per employee, a 6.0% increase. For 2026 it projects a 6.7% increase, which would take the average above $18,500. Applying 6.7% to $17,496 gives about $18,668, calculated here, consistent with that statement.

The preliminary release added context. It described 2026 as the largest increase since 2010 and said the figure would have been nearly 9% without any plan changes by employers. It also noted that 2026 would be the fourth straight year of elevated growth, following a decade in which increases averaged about 3%. Employees' share of costs typically rises at about the same rate as the total, which Mercer links to affordability concerns. Paycheck deductions were expected to rise 6% to 7% on average in 2026.

What is driving costs

Mercer's chief actuary for health and benefits, Sunit Patel, said in the preliminary release: "Health benefit cost trend has two primary components –healthcare price and utilization. Right now, both are rising."

On price, the release pointed to advances in diagnostics and therapeutics, such as cancer treatments and weight-loss drugs, that typically cost more than the treatments they replace. It also cited consolidation of providers into larger health systems, which has increased their bargaining power with insurers, along with general inflation and higher healthcare wages. On utilisation, it noted that use of health services has risen over the past two years, with contributing factors including care delayed or missed during COVID-19, easing labour constraints and the growth of virtual care.

The final survey adds specific figures for large employers, defined as those with 500 or more employees. Prescription drug spending rose 9.4% on average. Coverage of GLP-1 weight-loss medications rose to 49% of large employers in 2025, up from 44% in 2024.

What employers are doing

Mercer said 59% of employers would make cost-reduction changes for 2026, up from 48% in 2025 and 44% in 2024. The typical approach is raising deductibles and other cost sharing, which can increase members' out-of-pocket costs. Managing high-cost claims was the top priority, followed by measuring program performance, and third was expanding access to behavioural healthcare, which about two-thirds of large employers planned to prioritise. More than one-third of large employers would offer a non-traditional plan in 2026.

The final release gives further detail. Among large employers, 67% offered three or more medical plans at their largest worksite in 2025, up from 60% in 2023, and 35% offered at least one plan that steers employees to smaller networks of higher-performing providers. The average employee monthly premium for individual coverage was $191 in preferred provider organisation (PPO) plans, with an average deductible of $1,064, and $109 in high-deductible plans with health savings accounts, with an average deductible of $2,481. Specialised programs were offered by 32% for diabetes, 28% for musculoskeletal conditions and 23% for fertility. And 77% of large employers said measuring program performance would be a top priority over the next three to five years.

Worker affordability

Mercer also cites a separate survey of more than 2,000 US workers from the prior year, in which 28% of those with household incomes at or below the median said they were not confident they could afford necessary healthcare. Mercer's Ed Lehman said employers want to limit increases in paycheck deductions while making sure employees can afford the care they need.

Limits of the figures

Three limits apply. First, these are projections based on employers' own plans and expectations at the time of the survey. Second, the averages hide wide differences between small and large employers and between plan types. Third, the survey covers employers with 50 or more employees, so it says nothing directly about the smallest firms or about the individual market. Employers and workers should check their own plan documents for the actual premiums, deductibles and contributions that apply to them.