What Happened:
In its 2026 National Survey of Employer-Sponsored Health Plans, Mercer projected that total health benefit costs per employee will rise 6.5% this year, the biggest single-year jump since 2010 and the fourth straight year of elevated growth after a decade averaging around 3%.
59% are making plan-design changes in 2026, up from 48% last year, mostly by raising deductibles and other cost-sharing. Paycheck deductions are climbing 6 to 7% on average, and the per-employee cost is on track to clear $18,500.
The usual safety valve is closing in parallel. ACA marketplace sign-ups dropped by more than a million for 2026 as enhanced premium tax credits expired, and average marketplace deductibles jumped 37% to a record $3,786.
More Insight:
Without the cost-cutting moves Mercer counted, the 6.5% average benefit-cost increase would have hit nearly 9%. The headline figure is already the version where employers have stripped costs out of the plan, and most of that stripping shows up later as a higher deductible at the point of care.
Mercer's actuarial team is blunt about why this is sticky. "Health benefit cost trend has two primary components, healthcare price and utilization. Right now, both are rising," said Sunit Patel, Mercer's US chief actuary for health and benefits. Coverage of GLP-1 weight-loss drugs is now in roughly half of large-employer plans, pulling specialty drug spend higher, and post-pandemic utilization has not retreated to old baselines.
Ed Lehman, Mercer's US health and benefits leader, framed the 6 to 7% bump in paycheck deductions as the structural tension every plan sponsor is now sitting in. "Employers want to minimize increases in paycheck deductions while ensuring employees across all pay levels can afford the care they need," he said. In practice, raising the deductible is how that tension gets resolved most of the time, which shifts the bill from the paycheck to the moment someone gets sick.
Wages are still trailing inflation in real terms for a meaningful slice of workers, and the ACA marketplace, the historical fallback when employer coverage gets unaffordable, just got materially worse. Premium payments on the exchange rose 58% on average, and effectuated enrollment could end the year around 17 million, down from 22.3 million in 2025. The off-ramp is narrower.
From an employee's chair, comp and benefits are one number this year. A 3% merit pool against a 6 to 7% paycheck-deduction increase and a higher deductible reads as a real-terms cut, regardless of how the comp letter is worded. The teams that move first will fold the deduction hike into next year's comp model.