According to a recent study from Mercer, nearly half (48%) of U.S. large employers, those with 500 or more employees, expect to make changes to their medical plans, such as raising deductibles or co-pays, that will result in higher out-of-pocket costs for employees next year.
“Employers are under intense pressure to manage another year of elevated health benefit cost growth, but they also know that affordability matters deeply to employees,” said Simon Camaj, Mercer’s U.S. health leader. “What we’re seeing for 2027 is that employers are using different levers to manage costs—both traditional cost-sharing tactics and strategies that guide their people to higher-value care and provide support where it can have the greatest impact.”
See also: New bill would make insurers count all Rx purchases toward patient deductibles
Some employers are exploring alternative, lower-cost plan designs, with 31% of large employers offering or planning non-traditional medical plans by 2027 and another 38% considering them. These often feature reduced cost-sharing when members use high-performing provider networks.
Prescription drugs remain one of the largest anticipated cost drivers, with expenses projected to rise by about 9% in 2026 alone. Overall health benefit costs are also expected to increase by 6.7%, pushing the average cost above $18,500 per employee. As a result, managing pharmacy benefit costs is an imperative for employers.
While employer coverage for GLP-1 medications for weight loss has increased in recent years, reaching 49% of large employers last year, the latest survey suggests the trend may be shifting, with 6% of large employers dropping coverage for these drugs in 2026 and another 5% planning to drop coverage in 2027. Additionally, 27% tightened utilization controls this year, or plan to in 2027, reflecting mounting concern about the long-term budget impact of these medications.
“The pressure created by specialist drugs, gene therapies and GLP-1 medications is forcing employers to take a much harder look at their pharmacy strategies,” said Alysha Fluno, Mercer’s U.S. pharmacy practice leader. “For many plan sponsors, the priority now is not just managing pharmaceutical utilization by their health plan members, but gaining more transparency, control and confidence that every dollar spent is delivering maximum value.”
Large employers investing more in high-value benefits
Large employers are increasingly investing in high-value benefits that support family building and caregiving, with IVF coverage now offered by 50% of large employers and 77% of those with 20,000 or more employees. Many organizations also provide financial assistance for adoption (46%) and surrogacy (25%), while more than half offer childcare resources (51%) and eldercare benefits (58%) to help employees manage caregiving responsibilities.
Mercer’s survey finds that financial strain is the top concern for U.S. employees amid rising costs, and employers are responding by expanding financial counseling, debt and mental health support, and limited relief for those impacted by extreme weather, as well.
In summary, Mercer’s survey shows that rising healthcare and prescription drug costs are pushing employers to increase employee cost-sharing while also redesigning benefits and expanding support for caregiving, mental health and financial wellbeing.
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