Rising Costs of Employee Health Insurance Anticipated in 2027

A recent survey indicates that most U.S. companies foresee an increase in health insurance costs for employees by 2027.

According to Bloomberg, about two-thirds of large firms plan to raise monthly premiums deducted from employee paychecks, as found in a Mercer employer survey. Additionally, 48% of these companies expect to boost deductibles and co-pays, which suggests that out-of-pocket expenses for medical care will likely increase for workers.

Health insurers are also increasing costs for employers, with group plan expenses climbing by over 6% for the fourth consecutive year. This is a notable change from a more stable growth rate of about 3% seen for over ten years.

Simon Camadzi, Mercer’s U.S. health leader, mentioned that employers face significant challenges in managing these rising health benefit costs, yet he also highlighted the importance of affordability.

The findings indicate that organizations will be paying over $18,500 in medical benefits per employee, marking a 6.7% rise from 2025, which is the steepest increase in the last decade and a half.

This survey comes at a time when escalating medical costs significantly impact Americans’ financial well-being. Experts note that these rising health care expenses are pressuring small and medium-sized businesses, leading some to reduce bonuses, limit hiring, or even lay off staff.

In 2025, annual premiums for family health insurance covered by employers are projected to hit $26,993, reflecting a 6% increase compared to 2024. Employees, on average, will contribute around $6,850 towards the cost of family insurance.

Republican Senator Tim Scott from South Carolina has criticized the Affordable Care Act, stating that it has consistently forced middle-class families to face higher premiums. He described the healthcare system as being in a state of crisis since it was established.