Employer health costs: Why it could be another tough year

Employers who've been reeling from near double-digit health cost increases the past three years can expect more of the same in 2027, according to new projections from benefits consultant Aon.

Why it matters: Companies and their workers are locked in one of the most sustained periods of health care inflation in decades — and the trend lines are sure to intensify affordability concerns.

Driving the news: Rising demand for health services, more chronic disease and increased use of drugs like GLP-1s will help drive up employer health costs 9.5% next year — to more than $19,000 per employee, Aon said.

• Workers this year are expected to pay an average of $5,297 for health coverage, counting payroll contributions and out-of-pocket spending. That's $388 more than in 2025.
• There's also more cost pressure from the increased use of AI in billing and coding, which leads to more detailed documentation and contributes to higher charges in some cases.

The big picture: Employer health care cost increases have more than doubled since 2022, rising from 3.7% to 8.8% in 2026.

Between the lines: Employers who historically have had limited bandwidth to push back health costs are getting more proactive. Companies on average are responsible for about 82% of health plan costs, per Aon.

• They're eyeing changes to benefits and other cost-management strategies to offset some of the increases.
• The question is whether cost controls like kicking a high-cost provider out their network will cause backlash from workers.