Mercer Survey Finds US Employers and Workers Will Face Affordability Crunch as Health Insurance Cost Is Expected to Exceed $18,500 Per Employee in 2026
Mercer, a business of Marsh McLennan (NYSE:MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today released its 2025 National Survey of Employer-Sponsored Health Plans.
The survey found that in 2025, the average cost of employer-sponsored health insurance reached $17,496 per employee, a 6.0% increase well above the rate of inflation and wage growth. Contributing to the increase was sharp growth in prescription drug spending, which rose 9.4% on average among large employers (500 or more employees). Notably, more large employers covered costly GLP-1 weight-loss medications in 2025 – 49%, up from 44% in 2024.
An even higher total health benefit cost increase of 6.7% is expected in 2026, which will push the average cost above $18,500 per employee. In nearly all employer-sponsored health plans, cost is shared with employees through both premium contributions deducted from their paychecks and plan design features that shift some financial responsibility to plan members when they access care. Since employees' share of the cost of health coverage typically rises at about the same rate as overall cost, increases of this magnitude are heightening concerns about healthcare affordability. A year ago, a Mercer survey of over 2,000 US workers reported that 28% of those with household incomes at or below the median were not confident they could afford necessary healthcare.
"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," said Ed Lehman, Mercer's US Health and Benefits Leader. "It's a tough challenge, but there are ways that employers can make healthcare more affordable for employees."
According to Mr. Lehman, affordability strategies include offering employees more medical plan options, guiding them to high-performing providers and providing specialized health programs. He emphasized that for these initiatives to succeed, employees need to understand how they can take advantage of opportunities to save.
Offering employees more plan options – and new plan options
A good starting point for addressing affordability is offering an array of plans designed to meet different health needs and financial situations – and helping employees understand the implications of their enrollment decisions.
Traditional medical plans offer members a trade-off between the premium cost and the level of coverage provided. The differences in the plans offered can be meaningful. In Preferred Provider Organization (PPO) plans offered by large employers, the average monthly premium contribution paid by employees is $191 for individual coverage, and the average deductible is $1,064. In contrast, in a high-deductible Health Savings Account (HSA) plan, on average employees pay only $109 monthly for coverage, but the deductible is higher, at $2,481. An employee who usually does not hit their PPO deductible could save hundreds of dollars by moving to an HSA plan – and even more by contributing tax-free funds to their HSA.
In recent years, new, non-traditional medical plan models have been introduced that manage cost and address affordability in new ways, generally by using smaller networks of providers selected on the basis of cost and quality. These plans typically incentivize enrollment by offering employees lower contributions, lower cost-sharing, or both. Mercer's Survey on Health and Benefit Strategies for 2026 found that 35% of large employers now offer at least one plan that directs employees to smaller networks of higher-performing providers.
The survey also revealed that the number of medical plan choices offered to employers is increasing. In 2025, 67% of large organizations offered three or more medical plans at their largest worksite, up from 60% in 2023.
"We expect this trend will continue, as these newer plans tend to cost less and offer more affordable benefits to the plan member," said Tracy Watts, Mercer's US Leader for Healthcare Policy. "Employers have workforces with diverse needs. When employees choose the right plan for themselves, they can unlock savings."
Specialized programs for managing health issues
A notable portion of employers provide specialized, stand-alone programs designed to help employees better manage specific health conditions. These programs are typically low-cost or free to members and are often delivered virtually. In 2025, 32% of large employers offer a stand-alone specialized diabetes program, 28% offer a musculoskeletal program, and 23% offer a fertility program.
"The best of these programs help members better manage their health conditions, which creates opportunities for both employees and employers to reduce healthcare spending over time," said Mr. Lehman. "But results are not a given. The key is having the right metrics to monitor program performance."
The survey found that a top priority for employers over the next three to five years is measuring the performance of their health programs to ensure they are delivering value. Over three-quarters of large employers (77%) said this would be an important priority during that timeframe.
About Mercer's National Survey of Employer-Sponsored Health Plans
Now in its 40th year, Mercer's National Survey of Employer-Sponsored Health Plans included 2,010 employers in 2025. Results are weighted to represent all US health plan sponsors with 50 or more employees. The survey was fielded from June 10 through August 15, 2025. Results are discussed in greater detail on Mercer's US Health News blog.
About Mercer
Mercer, a business of Marsh McLennan (NYSE:MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit mercer.com, or follow on LinkedIn and X.
View source version on businesswire.com: https://www.businesswire.com/news/home/20251118899892/en/
Media:
Ashleigh Jang
Mercer
+1 212 345 3965
[email protected]