Marsh projects 8.2% average increase in employer-sponsored health benefit costs for 2027

If employers took no action to lower costs, the average increase would be 11%. Several factors are driving these rising costs, including higher treatment costs for serious illnesses like cancer, the consolidation of health providers into larger systems, and soaring prescription drug prices, particularly for GLP-1 medications used for weight loss. Additionally, the rapid adoption of AI-enabled software and the unexpected volume of cases in the Independent Dispute Resolution process under The No Surprises Act are contributing to the spike. To manage these costs, 59% of employers plan to make cost-cutting changes to health benefits in 2027. These measures include raising deductibles, which increases out-of-pocket costs for workers, and offering lower-cost, quality-focused plan options. While employers typically absorb about 80% of the costs, many workers are likely to face higher paycheck deductions and higher out-of-pocket expenses next year.