Average Employee Spending Reaches $5,297, Up $388 From Last Year
Employer Health Costs Expected to Jump 11.1% in 2027, Largest Increase in Two Decades
American workers are paying significantly more for employer-sponsored health insurance this year, and experts warn that costs are expected to rise even further in 2027 as employers continue to grapple with rapidly increasing healthcare expenses.
According to a report by The Wall Street Journal, citing new research from benefits consulting firm Aon and human resources consulting company WTW, the average employee enrolled in a workplace health plan is expected to spend $5,297 on healthcare in 2026, an increase of $388, or 7.9%, from the previous year.
The figure includes payroll-deducted insurance premiums, deductibles, copayments, coinsurance and other out-of-pocket medical expenses.
Employers are also facing mounting financial pressure. WTW projects that employer healthcare costs will increase by an average of 11.1% in 2027, marking the largest annual increase in more than 20 years. Healthcare expenses have risen sharply for five consecutive years, prompting many companies to reconsider the sustainability of their current benefit plans.
Industry experts attribute the surge largely to the growing use of expensive specialty medications, particularly new cancer treatments and GLP-1 drugs used for obesity and diabetes. Increased utilization of healthcare services, a growing number of patients with chronic illnesses, and hospitals’ expanded use of artificial intelligence for medical documentation and billing have also contributed to higher medical costs.
As healthcare spending continues to outpace wage growth, employees are feeling greater financial strain. While many employers have attempted to contain costs by redesigning health plans, increasing deductibles or requiring workers to pay a larger share of premiums, analysts say those measures have done little to slow the overall rise in healthcare expenses.
Experts expect insurance premiums and out-of-pocket costs to continue increasing as long as demand for high-cost specialty drugs and medical services remains strong. They warn that employers will likely face difficult decisions over benefit design in the coming years, while workers may have to shoulder an even greater share of their healthcare costs.
Despite ongoing efforts by companies to manage expenses, analysts say there is little indication that the upward trend in healthcare costs will ease in the near future. Instead, both employers and employees are expected to continue facing growing financial pressure from rising medical expenses.
