US Employer Healthcare Costs Projected to Rise 9.5 Percent

US employer healthcare costs are projected to increase 9.5 percent in 2027, pushing the average cost above $19,000 per employee, according to Aon. The projection would mark the fourth consecutive year in which healthcare cost trends have approached double-digit increases.

Aon attributed the continued increases to greater use of healthcare services, a higher prevalence of chronic conditions and growth in high-cost claims. Prescription drug spending also remains a significant factor, driven by increased use of specialty medications and GLP-1 (glucagon-like peptide-1) therapies, a class of drugs used to treat conditions including type 2 diabetes and obesity.

The use of GLP-1 treatments is expanding into other clinical areas, including cardiovascular disease, sleep apnea, and chronic kidney disease, while emerging oral formulations could broaden treatment options. Emerging oral formulations could also broaden access and treatment options. Aon said providers' adoption of technologies, such as artificial intelligence, for more detailed clinical documentation and coding is contributing to higher billed charges in some cases.

"Employers have now experienced several consecutive years of healthcare cost increases that are approaching double digits," Mike Pasterick, North America health solutions leader for Aon, said. "At this level, rising healthcare costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities."

Employers continue to absorb most health plan expenses. Their average share of plan costs was 82.2 percent in 2026, up from 81.8 percent in 2025. Average employer costs increased 8.8 percent, from $13,269 in 2025 to $14,432 in 2026. Total plan costs rose 8.3 percent, from $16,212 to $17,562.

The increases varied among employers, with the middle 50 percent experiencing total plan cost increases ranging from 5.5 percent to 11.5 percent.

Employees are also paying more. Total employee costs are expected to average $5,297 in 2026, up 7.9 percent from $4,909 in 2025. The 2026 total consists of $3,130 in payroll contributions, an increase of 6.4 percent, and $2,167 in out-of-pocket expenses, an increase of 10.2 percent. Aon attributed higher out-of-pocket expenses to increased use of healthcare services and enrollment in leaner plan options.

Cost increases were recorded across the industries examined. Employer cost increases from 2025 to 2026 ranged from 6.5 percent in health care to 9.8 percent in finance and insurance. Total plan costs increased more than 6 percent in every industry analyzed. Employee contribution increases remained below employer contributions and total plan cost increases across all industries.

"The organizations best positioned for the future will be those that can proactively identify emerging risks and take targeted action before costs escalate," Debbie Ashford, North America chief actuary, health solutions for Aon, said. "Healthcare costs are becoming increasingly difficult to manage through traditional approaches alone."