American employers are approaching an uncomfortable choice: absorb another large increase in healthcare costs or pass more of it on to workers. Mercer projects that employer health-benefit costs will rise 6.7% in 2026, the steepest increase in 15 years, pushing the average cost above $18,500 per employee. Nearly half of large employers expect medical plan changes in 2027 that will increase employees’ out-of-pocket costs.
Before employers ask workers to pay more, however, they should ask healthcare providers a question they routinely ask every other major supplier: Are we using what we’re already paying for efficiently? Companies would not respond to an inefficient manufacturing operation simply by purchasing more machinery. A CFO considering a major capital investment would first ask whether the shortage was real or resulted from how existing resources were managed. Yet employers spend enormous sums purchasing healthcare without consistently demanding the same operational discipline.
