Employers expect to see health benefits rise by 6.7% in 2026, reaching more than $18,500 per employee on average, according to a new report.
Analysts at Mercer estimate that health costs in 2025 reached an average of $17,496 for each employee, growth of 6%. That’s a rate that outpaced inflation and wage growth, according to the report.
The increase was driven by a sharp spike in prescription drug spending, which increased by 9.4% on average for large employers, or firms with at least 500 employees. Within that, large employers were more likely to cover GLP-1 drugs for weight loss this year, with 49% offering coverage compared to 44% in 2024.
A projected 6.7% rise in total cost is also expected to significantly increase employees’ cost-sharing in tandem next year, according to the report, which makes affordability an even greater challenge.
“Employers want to minimize increases in paycheck deductions while ensuring employees across all pay levels can afford the care they need, when they need it,” said Ed Lehman, Mercer’s U.S. health and benefits leader, in a press release. “It’s a tough challenge, but there are ways that employers can make healthcare more affordable for employees.”
For employers that are aiming to manage affordability, the report recommends starting by offering a good variety of plan options that meet different health needs and financial levels, while making sure that workers understand their options and how they work.
With this backdrop, the report found that the number of plans on offer is growing, with 67% of employers offering three or more medical plans at their largest worksite. By comparison, 60% of employers offered at least three plans in 2023.
That includes newer, nontraditional medical plans that lean on different strategies to manage costs. For example, the survey found that 35% of employers offer a plan that directs workers to care in a smaller, high-performing provider network.
Employers are also aiming to do more to measure how effective and valuable their offerings are. Most (77%) of the large employers said they plan to make measuring performance a priority over the next three to five years.
In addition to broader offerings generally, many employers are exploring programs that aim to manage certain priority conditions, according to the study. As of 2025, 32% of large employers offer a specialized diabetes program, while 28% offer a musculoskeletal program. Twenty-three percent offer a fertility care program.
“The best of these programs help members better manage their health conditions, which creates opportunities for both employees and employers to reduce healthcare spending over time,” said Lehman. “But results are not a given. The key is having the right metrics to monitor program performance.”