--- title: Steepest Rise in Employer Health Insurance Costs Projected for 2026 description: Health benefit costs are projected to rise by 6.5% per employee in 2026, the largest increase since 2010, with most employers planning cost-cutting measures and employees facing higher premiums and out-of-pocket expenses. image: https://blog.nisbenefits.com/hubfs/blog-headers/hc-cost-26-b.jpg --- ![graph with percentage signs and arrow moving up](https://blog.nisbenefits.com/hubfs/blog-headers/hc-cost-26-b.jpg) # Steepest Rise in Employer Health Insurance Costs Projected for 2026 - Home - [Employee Benefit News for School, City and County Employers](https://blog.nisbenefits.com) - Steepest Rise in Employer Health Insurance Costs Projected for 2026 [ Mari Wagner ](https://blog.nisbenefits.com/author/mari-wagner) 09/24/2025 [ Health Insurance Solutions](https://blog.nisbenefits.com/topic/health-insurance-solutions), [ Legislative News](https://blog.nisbenefits.com/topic/aca-other-legislative-news) [0 Comments ](https://blog.nisbenefits.com/employer-health-insurance-costs-projected-2026#postComment) 1 Minutes A new Mercer [report](https://www.mercer.com/en-us/about/newsroom/employers-are-bracing-for-the-highest-health-benefit-cost-increase-in-15-years/) projects a 6.5% average increase in total health benefit costs per employee for 2026, the largest jump since 2010. Over the past decade, annual increases averaged just 3%. Without plan changes, the 2026 increase would have approached 9%. With health care costs remaining high, 59% of employers plan to reduce health plan expenses in 2026, up from 44% in 2024. As more employers are unable to absorb rising costs, employees are expected to pay 6–7% more in premiums, with some organizations also increasing deductibles and copays. Industry experts are sounding the alarm for 2026, with forecasts from the Business Group on Health pointing to a 7.6% jump in costs and PwC predicting medical expenses will surge 8.5% for a third year running. No matter the exact percentage, both employers and employees should prepare for another significant climb in health care costs next year.   ## **Why Are Costs Rising?** Rising utilization is only part of the story, employers cite several additional factors driving the 2026 increase: - Rising cancer rates and escalating treatment costs - Higher pharmacy costs, especially increased use of expensive GLP-1 drugs for weight loss - Increasing cases of chronic and complex conditions - Greater use of mental health services as employers improve access and reduce stigma   ## **What It Means**  Mercer anticipates more employers will offer a wider range of health plan options, including tiered networks with varied out-of-pocket costs. Employers should closely track cost trends as open enrollment approaches. Download the [bulletin](https://blog.nisbenefits.com/hubfs/blog-supporting-docs/bulletin-2026-health-ins-increases.pdf) for more details. 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