The cost of employer-provided health insurance is expected to rise sharply in 2026, with companies preparing for the highest increase in 15 years.
Why it matters: Employees will likely face higher premiums, deductibles, and copays, adding to the financial strain many are already experiencing due to high consumer prices.
The details:
- Workers can expect to pay an additional 6% to 7% in premiums on average, according to Mercer.
- 59% of employers intend to make cost-cutting changes to their health plans in 2026, up from 44% in 2024.
- These measures often involve requiring employees to pay more when seeking care through higher deductibles and out-of-pocket costs.
- Employers are also focusing on managing high-cost claims, measuring the performance of health programs, and making behavioral healthcare more accessible.
The projected 6.5% increase for 2026 marks the fourth consecutive year of elevated cost growth, following a decade of more moderate annual increases averaging about 3%.
What’s driving the increase:
- Higher prices for health care services and increased utilization are the primary factors.
- Advances in diagnostics and therapeutics, such as cancer treatments and weight-loss drugs, often cost more than the treatments they replace.
- Provider consolidation has improved their ability to negotiate reimbursement rates with insurers.
- Inflation across the general economy, including higher wages in the healthcare sector, has also contributed to price increases.
What it means for workers:
- Employees are likely to see higher costs for their health coverage in 2026, with paycheck deductions for health coverage expected to rise by about 6% to 7% on average.
- Higher out-of-pocket spending may also be a factor for some employees due to increases in deductibles and copays.
- Experts worry that some employees may skip or delay medical care because they can no longer afford it.
What’s next: Employees should stay informed during open enrollment periods to make the best decisions regarding their health care plans, carefully weighing the trade-offs between premium costs and cost-sharing provisions.
