Mercer projects an 8.2% average increase in health benefit costs for employer-sponsored plans in 2027

If employers took no action to lower costs, the average increase would be 11%. Several factors are driving this growth. Ongoing pressures include advances in diagnostics and therapeutics, the consolidation of health systems, and government funding that fails to keep pace with inflation. Newer drivers include the rapid adoption of AI-enabled software, the rise of GLP-1 medications for weight management, and an unintended consequence of The No Surprises Act. The Independent Dispute Resolution process established by the Act has resulted in more cases and higher awards than predicted. To manage these costs, 59% of employers plan to make cost-cutting changes to health benefits in 2027. Many large employers expect to increase the share of premium costs paid by employees. Others are focusing on higher-quality care and managing high-cost claims for expensive new therapies.