U.S. employers are expected to face significantly higher health insurance costs in 2027, a trend that may increase the amount workers pay for medical coverage. Health benefits consulting firm Marsh projects that the total health benefit cost per employee—encompassing both employer and employee premium contributions—will rise by an average of 8.2% in 2027. This represents the steepest increase recorded since 2003.

The Marsh forecast includes anticipated cost-saving measures taken by employers, such as raising deductibles. While raising deductibles typically lowers monthly premiums for employees, it increases their out-of-pocket expenses. Without these cost-saving steps, employers reported that their health plan costs would increase by an average of 11%, according to Marsh. The projections stem from a national survey conducted by Marsh over the summer regarding employer-sponsored health plans.

Drivers of rising healthcare expenses

Several factors have contributed to the surge in the cost of employer-sponsored health plans in recent decades. According to nonprofit health policy researcher KFF, rising treatment costs for serious illnesses, such as cancer, are a primary driver. Marsh also notes that the number of health providers has shrunk, providing them with greater leverage during cost negotiations with insurers.

Soaring prescription drug prices are another contributing factor. New treatments, specifically GLP-1 drugs used for weight loss, are driving up healthcare expenses as more companies cover the cost of the medication. The rise in GLP-1 costs has led some employers to withdraw coverage or implement stricter qualification requirements to mitigate spending, according to Beth Umland, director of employer research for health and benefits at Marsh.

Impact on employees and cost-sharing patterns

Employers typically absorb approximately 80% of health plan costs, while workers shoulder the remaining portion. Matthew Rae, associate director of the healthcare marketplace at KFF, told CBS News that this split has remained roughly consistent for about 20 years.

"That split has been roughly consistent over time, like over a long period of time, over 20 years," Rae said. "Historically, when premiums have gone up, workers and employers have sort of shared the burden."

While some employers may absorb more costs due to specific industry dynamics, Rae noted that many workers are likely to see increased costs for medical coverage, maintaining a historical pattern where both parties pay more.

Umland also anticipates that health costs will rise for employees in 2027.

"It is fair to say that most employees will spend more on healthcare next year, with both higher paycheck deductions and higher out-of-pocket costs," Umland said. "Employers have been trying to avoid shifting health costs to employees in recent years, but after a few years of elevated cost increases, many will feel they have no choice."

Marsh's survey indicates that 59% of employers plan to implement cost-cutting changes to health benefits next year, such as increasing deductibles. Additionally, an earlier Marsh survey found that approximately two-thirds of large employers expect to increase the share of premium costs paid by employees next year.

Current spending and insurance coverage

An August forecast from insurance broker and consulting firm Aon provides a look at current spending levels. Aon forecasts that workers will spend an average of $3,130 this year on health plan premiums and $2,167 on out-of-pocket costs. This brings the total annual health insurance bill to nearly $5,300, a 7.9% increase from last year's total of $4,909. An Aon spokesperson stated this would be the largest percentage increase in a decade.

These projected increases coincide with the upcoming open enrollment season, which typically occurs between September and November. According to KFF, approximately two-thirds of people under age 65—roughly 165 million people—had employer-sponsored health insurance in 2025.