---
title: "Employee Health Costs Are Rising at a 24 Year High"
canonical: "https://www.metaintro.com/blog/employee-health-costs-24-year-high-open-enrollment-2027"
language: "en"
author: "drashtigarach"
published: "2026-09-03T11:50:26.000Z"
modified: "2026-09-03T12:53:26.311Z"
---

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# Employee Health Costs Are Rising at a 24 Year High and How to Prepare for Open Enrollment

Health benefit costs are set to rise 8.2 percent in 2027, the most since 2003, while pay rises 3.5 percent. How to prepare for open enrollment.

[![Drashti Garach](https://cdn.metaintro.com/rs:fill:40:40/q:72/plain/images/5719d740-e510-42bc-8017-e040d145f35f_1766029465094.png)Drashti Garach @DrashtiGarach](/blog/author/drashtigarach)

[September 3, 2026](/blog/archive/2026/09)13 min read

![Employee Health Costs Are Rising at a 24 Year High and How to Prepare for Open Enrollment](https://cdn.metaintro.com/rs:fill:1200:675/q:78/plain/images/10132b-pharmacy-drivethru.png)

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The cost of employer health coverage is set to rise 8.2 percent per employee in 2027, the steepest increase since 2003, and a large share of that will land on employees rather than on employers. [Forbes](https://www.forbes.com/sites/brucejapsen/2026/09/02/workers-face-open-enrollment-shock-as-cost-increase-hits-24-year-high/) reported the figure as an open enrollment shock, and the underlying number comes from preliminary results of the [2026 National Survey of Employer-Sponsored Health Plans](https://www.mercer.com/en-us/about/newsroom/employers-expect-health-benefit-costs-to-jump-in-2027/). The practical point for anyone with workplace coverage is that this is a decision season, not just a news story, and the choices you make during open enrollment this autumn will set what comes out of your pay for the whole of next year. At [Metaintro](https://www.metaintro.com), we treat benefits as part of pay, because that is how they behave.

## What exactly is happening to health costs in 2027?

[Marsh](https://www.mercer.com/en-us/) surveyed more than 1,800 US employers and found that total health benefit cost per employee is expected to rise 8.2 percent on average in 2027. That figure already accounts for the cost-reduction measures employers plan to take. Without any action at all, employers said their current plans would cost 11 percent more, which is the number the [New York Times](https://www.nytimes.com/2026/09/02/business/health-insurance-increases.html) led with. The gap between those two figures, roughly three percentage points, is the amount employers intend to remove by changing plans, and changing a plan almost always means changing what it covers or what you pay when you use it. Marsh notes this will be the fifth consecutive year of elevated cost growth after a decade of far more moderate increases, and the highest of those five years. This year's projected increase was 6.7 percent, so the trend is accelerating rather than levelling off. Five consecutive years matters more than any single figure, because it means the compounding has already happened. A plan that cost a given amount in 2022 is not facing one large increase, it is facing the sixth in a row on top of a base that has already moved a long way.

Simon Camaj, Marsh's US Health and Benefits Leader, said in the release that few organisations can absorb health cost increases that outpace inflation without making difficult financial decisions. That sentence is worth reading as a warning rather than as corporate framing. When an employer cannot absorb a cost, the cost does not disappear. It moves. The survey found that 59 percent of employers plan to make cost-cutting changes to health benefits in 2027, including plan design changes such as higher deductibles that increase what members pay out of pocket. For employees, that is the part of the story that actually shows up in a bank account, and it arrives through the enrollment paperwork rather than through any announcement. That is worth naming plainly. Most employees will learn about an 8.2 percent structural shift in their compensation from a benefits portal in October, framed as a routine annual selection rather than as the pay decision it actually is.

## Why will your paycheck deduction rise by more than 8.2 percent?

Because the average increase and your increase are different numbers. Marsh reported that a survey it conducted earlier this year found [about two thirds of large employers, those with 500 or more employees, expect to increase the employee share of premium costs next year](https://www.mercer.com/en-us/about/newsroom/employers-are-shifting-healthcare-costs-to-employees/). When an employer both faces an 8.2 percent cost increase and shifts a larger proportion of the total onto staff, the employee portion rises faster than the overall figure. Marsh states this directly, noting that many employees will see their paycheck deductions for health coverage rise by more than the 8.2 percent average. So the headline number is the floor for a lot of people, not the expectation. If you work for a large employer, the reasonable planning assumption is that your share rises by something above 8.2 percent, and the only way to find your own number is to open the enrollment materials and compare them against your current deduction line by line.

There is a second layer underneath that. The same earlier survey found nearly half of large employers, 48 percent, expect to make changes such as raising deductibles or copays that increase employees' out-of-pocket costs. Those changes do not appear in your deduction at all. They appear later, at the point you actually use the coverage, which is why people who compare only the per-paycheck premium during enrollment frequently choose a plan that costs them more over a year. The premium is the visible price. The deductible, the copay structure and the out-of-pocket maximum are the rest of the price, and in 2027 more of the cost is moving into those less visible components. This is the single most common enrollment mistake and it is entirely avoidable. A plan with a lower monthly premium and a much higher deductible is a bet that you will not need care, and that bet is only sensible if you can comfortably absorb the deductible in a bad year.

## What is actually driving the increase?

Sunit Patel, Marsh's US Chief Actuary for Health and Benefits, pointed to a mix of long running pressures and newer ones. Advances in diagnostics and treatment improve outcomes but usually cost more than what they replace. Health system consolidation and lower government funding and reimbursement in public programmes push more of the charge for care onto employer plans. Those forces have kept medical cost trend above general inflation for years and explain the baseline, but they do not explain why 2027 is the highest in more than two decades.

Three newer factors do. Marsh estimates that rising use of GLP-1 medications for weight management accounts for a full percentage point of total cost growth in 2027 on its own, which is why [coverage for these drugs has become a live benefits question](https://www.metaintro.com/blog/gen-z-glp1-drug-coverage-employee-benefit) rather than a niche one. The rapid adoption of AI-enabled billing software that helps physicians submit claims has resulted in more claims being filed and at higher levels of reimbursement. And payments awarded to out-of-network providers through the Independent Dispute Resolution process created under the No Surprises Act have come in larger than expected. Two of those three are administrative rather than clinical, which is a genuinely uncomfortable finding: part of what you will pay next year reflects how claims are processed rather than how much care anyone received. There is no action an individual employee can take about that, which is precisely why the personal response has to be about plan selection and negotiation rather than about using less care.

## How does this compare with what you will actually be paid?

This is where the number stops being abstract. Marsh's [QuickPulse compensation survey of 1,001 US organisations](https://www.mercer.com/en-us/about/newsroom/us-employers-stick-with-moderate-pay-increases-for-2027/) found employers plan base salary merit increases averaging 3.2 percent in 2027 and total salary increases, including merit, promotions, cost-of-living adjustments and other changes, averaging 3.5 percent. Set that against an 8.2 percent rise in health benefit cost and a faster rise in the employee share, and the arithmetic is unforgiving. Health costs are growing at more than double the rate of pay, and the survey notes the pay figure is roughly in line with what employers actually delivered in 2024, 2025 and 2026, so this is not a one year anomaly.

The practical consequence is that a raise that looks like a raise on paper can be a real terms cut once benefits are counted, which is the mechanism behind [shrinking paychecks even as headline wealth figures rise](https://www.metaintro.com/blog/why-paychecks-are-shrinking-even-as-us-household-wealth-hits-record-highs) and behind [real wages falling despite nominal increases](https://www.metaintro.com/blog/real-wages-fell-2026-what-it-means-for-your-raise). If you are planning to ask for more money next year, the benefits change is part of your case rather than a separate topic, and going in with the actual figures makes the conversation about arithmetic instead of about feelings. Expect the response to be constrained, since [raises in 2027 are being set smaller and more strategically](https://www.metaintro.com/blog/2027-raise-smaller-more-strategic). Knowing the constraint your manager is working under does not weaken your position. It tells you which levers are available, and in a year like this the benefits lever is often looser than the salary one.

## What should you do before open enrollment closes?

Model the total cost of each plan rather than comparing premiums. Add twelve months of payroll deductions to a realistic estimate of what you will spend on care, then check that figure against each plan's out-of-pocket maximum, which is the worst case you can face in a year. People with predictable ongoing costs and people with almost no expected costs often reach opposite conclusions from the same plan menu, and both can be right. Check whether your prescriptions have moved tier, because formulary changes happen quietly at renewal and a drug that cost you very little this year can cost several times that next year without the plan name changing at all.

Then look at what is new on the menu. Marsh found that 12 percent of large employers plan to offer variable copay plans in 2027, rising to 18 percent among employers with 20,000 or more staff, and that 31 percent of large employers offer or plan to offer at least one non-traditional plan such as a high performance network. These generally charge you less when you use pre-selected providers, which is a real saving if your existing doctors are in the network and a real cost if they are not. Check the provider list before the plan, not after. Switching doctors to save on premiums is a legitimate choice, but it should be a choice you make deliberately rather than one you discover in January when a claim is denied as out of network. Marsh's full [survey on health and benefit strategies](https://www.mercer.com/assets/us/en_us/shared-assets/local/attachments/pdf-survey-on-health-and-benefits-strategies-for-2027-report.pdf) sets out what employers are weighing, and reading it makes the enrollment menu considerably easier to interpret.

## Should health coverage change how you evaluate a job offer?

It already does for a lot of people, and it is worth making that explicit rather than accidental. Coverage quality is a meaningful part of total compensation, and it is the part most candidates never ask about until after they accept. A difference of a few thousand dollars in annual out-of-pocket exposure can erase a salary increase entirely, which is why [rising healthcare costs have become a real factor in job decisions](https://www.metaintro.com/blog/healthcare-costs-rising-factor-benefits-job-decision) rather than a footnote. Ask for the summary of benefits and coverage document before you accept, not the glossy benefits brochure, because the summary is standardised and comparable while the brochure is marketing.

There is a harder edge to this. Coverage is also what keeps people in jobs they would otherwise leave, and roughly [one in four workers report being stuck in a job because of health insurance](https://www.metaintro.com/blog/1-in-4-workers-stuck-jobs-health-insurance). Knowing that about yourself is useful, because it tells you what you are actually negotiating for. If coverage is the binding constraint, then a role with better coverage and the same salary is a raise, and treating it as one changes which offers are worth pursuing. Marsh's own research on employee sentiment found that [economic anxiety is pushing people to stay put](https://www.mercer.com/en-us/about/newsroom/amid-economic-and-ai-anxieties-us-employees-are-choosing-to-stay-put/), and covering monthly expenses was the top concern raised, particularly among lower paid workers. That combination, rising fixed costs alongside a reluctance to move, is how people end up underpaid for years without any single decision causing it.

## What does this mean for your career right now?

Treat this enrollment season as a compensation event and give it the time you would give a salary negotiation. Put a calendar block on the enrollment deadline the day it is announced, because the single most expensive outcome is defaulting into last year's plan without checking what changed in it. Defaults are not neutral in a year when 59 percent of employers are altering plan design. If your employer offers a health savings account with a contribution, understand the match before you choose a plan, since that contribution is part of the comparison and is frequently the deciding factor between two otherwise similar options. Employer contributions to these accounts are effectively additional compensation, and they are frequently overlooked because they sit on a different page of the enrollment portal from the premium comparison table.

Beyond the paperwork, use the numbers. Benefits are negotiable more often than salary is, particularly late in a hiring process when the salary band is fixed and the employer still wants to close, and there are [more things to negotiate besides salary](https://www.metaintro.com/blog/things-to-negotiate-besides-salary-2026) than most candidates realise. The broader lesson from this survey is that the value of a job is drifting away from the headline number on the offer letter, which is why [employer healthcare costs increasingly belong inside salary negotiations and career decisions](https://www.metaintro.com/blog/employer-healthcare-costs-salary-negotiations-career-decisions-2026) rather than alongside them. Anyone comparing two roles on base pay alone in 2027 is comparing an incomplete number. Build the habit now, while the difference is large enough to be obvious, and it will keep serving you in years when the gap is subtler.

## Related Articles

- [Employer health costs per employee in the year ahead](https://www.metaintro.com/blog/employer-health-costs-19000-per-employee-2027)
- [Parental leave cuts as healthcare costs spike](https://www.metaintro.com/blog/parental-leave-cuts-healthcare-cost-spike-2026)
- [What employees actually want from their benefits](https://www.metaintro.com/blog/gartner-employee-benefits-preferences-2026)
- [Employers spend more on benefits as worker stress rises](https://www.metaintro.com/blog/employers-benefits-spend-workers-stress-2026)
- [How to negotiate a job offer](https://www.metaintro.com/blog/how-to-negotiate-a-job-offer)
- [The retirement benefit most workers never set up](https://www.metaintro.com/blog/retirement-benefit-fine-most-workers-never-set-up)
- [Weight loss drugs and what they do to healthcare costs](https://www.metaintro.com/blog/weight-loss-drugs-healthcare-costs-2025)
- [Questions to ask before cutting an employee benefit](https://www.metaintro.com/blog/3-questions-before-cutting-employee-benefit)

## People Also Asked

### Q: How much are employer health costs rising in 2027?

A: Total health benefit cost per employee is expected to rise 8.2 percent on average, the highest increase since 2003, based on preliminary results from Marsh's 2026 National Survey of Employer-Sponsored Health Plans covering more than 1,800 US employers. Without any cost-reduction measures, employers said their current plans would cost 11 percent more.

### Q: Will my own health insurance deduction go up by 8.2 percent?

A: Probably by more. Marsh reported that about two thirds of large employers expect to raise the employee share of premium costs next year, which means many workers will see paycheck deductions rise faster than the 8.2 percent average. Separately, 59 percent of employers plan plan-design changes such as higher deductibles, and those costs appear when you use care rather than in your deduction.

### Q: What is driving health costs to a 24 year high?

A: Marsh points to long running pressures including advances in treatment, health system consolidation and lower government reimbursement, plus newer factors. Rising use of GLP-1 weight management medications alone accounts for a full percentage point of 2027 cost growth. AI-enabled billing software has increased the number and level of claims filed, and out-of-network payments through the No Surprises Act dispute process came in larger than expected.

Wondering what you should actually earn once benefits are counted? [Metaintro](https://www.metaintro.com) matches you with roles based on your real experience and helps you compare the whole package rather than the headline salary. [Create your free profile](https://www.metaintro.com/signup) and see what your next move is worth.

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