Why 2027 Employer Health Forecasts Range 8.2% to 11.1%

In August and September of 2026, five organisations published forecasts for what American employers will pay for health benefits in 2027. Their headline numbers were 8.2%, 9.2%, 9.5%, 10% and 11.1%. All five surveyed large US employers, all five covered the same plan year, and the gap between the lowest and highest is nearly three percentage points — on a base of roughly $19,000 per employee, that is a difference of more than $500 a head.

The spread is not sloppiness. It is almost entirely one methodological choice, made differently by each firm, and once you correct for it the forecasts agree far more closely than the headlines suggest. The more interesting disagreement is the one nobody puts in a press release: federal actuaries at the Centers for Medicare & Medicaid Services expect private health insurance spending to grow about 5% a year, roughly half what the benefits consultancies are projecting.

Five forecasts for the same year

Read the last two columns rather than the headlines and the picture changes. Mercer's 8.2% and WTW's 11.1% — the two figures most often quoted against each other — are not rival estimates of the same quantity at all. Mercer's ~11% before-changes figure and WTW's 11.1% before-changes figure are, to within a rounding error, the same forecast.

The spread is mostly one choice

Every forecaster has to decide whether to model what health plans would cost if employers left them alone, or what employers will actually book after they raise deductibles, narrow networks and change pharmacy terms.

Aon states the choice explicitly: its projection applies "in a status quo environment when employers do not make changes or implement care management programs."⁶ Mercer publishes both numbers side by side — for 2026 it projected 6.5% after employers' planned changes against nearly 9% with no action.⁷ WTW publishes both too, at 11.1% and 9.7%.² The Business Group on Health publishes both, at 9.2% and 8.0%.³

The size of that wedge is remarkably stable. Mercer's 2026 pair implies roughly 2.4 percentage points of cost-shifting; its 2027 pair (about 11% down to 8.2%) implies about 2.8; WTW's 2027 pair implies 1.4; the Business Group on Health's implies 1.2. In 2026, 59% of Mercer's respondents planned cost-shifting measures such as raising deductibles and other cost sharing,⁷ and the same 59% figure appears for 2027.¹

That is the single most useful thing to understand about these numbers. An employer-facing headline of 8.2% and an employee-facing experience of an 11% plan are perfectly compatible.

What happened to last year's forecasts

Forecast accuracy is checkable here, because Aon publishes both a projection and, a year later, a realised figure on the same per-employee basis.

In August 2024, Aon projected that 2025 employer health costs would rise 9.0%, pushing average cost per employee past $16,000.⁸ In September 2025, Aon reported the 2025 actual: an average total plan cost of $15,860 per employee, up 6.7%.⁶ In the same release it projected 9.5% for 2026 and a cost per employee above $17,000.⁶ In August 2026, Aon reported 2026 actuals of 8.8% growth in employer cost and 8.3% growth in total plan cost.⁴

So the projections came in high twice: by about 2.3 percentage points for 2025 and by roughly 0.7 to 1.2 points for 2026, depending on which realised measure you use. But this is not evidence that Aon forecasts badly. It is the before-and-after wedge again, showing up in the same dataset across time: Aon projects a status-quo world, employers then change their plans, and the realised number lands lower. A 2.3-point miss on a status-quo projection is almost exactly the 2.4-point cost-shifting wedge Mercer independently reported for the same period.⁷

Two independent firms, using different samples and different survey instruments, therefore converge on the same underlying estimate: American employers move roughly two to two-and-a-half percentage points of annual health trend onto employees.

Mercer's own 2026 number also moved. Its September 2025 press release projected 6.5%;⁷ its later survey material puts the 2026 figure at 6.7%, against 6% in 2025.⁹ The revision is small, but it is a reminder that the September number is preliminary, drawn from early responses while the survey is still in the field.

What is driving it

The forecasters name overlapping causes, and two of them are quantified well enough to check.

GLP-1 drugs. Aon's 2024 analysis put GLP-1 medications at roughly 1% of the aggregate cost increase.⁸ Mercer's 2027 material attributes about one percentage point of the projected increase to GLP-1 weight-management drugs.¹ Two forecasters, two years apart, independently landing on the same figure is about as corroborated as a number in this field gets. WTW measures it differently and finds a much larger footprint: among employers that cover GLP-1s for weight loss, those drugs averaged 11.4% of total annual claims in 2026, up from 6.9% in 2023.² The two are compatible — one is the drug's contribution to the change in total cost across all employers, the other is its share of claims among the subset that covers it.

The underlying prevalence has moved fast enough to explain the attention. Roughly one in eight American adults now uses a GLP-1 drug, at a typical cost of $1,000 to $1,500 a month.⁵

High-cost claimants and specialty drugs. The International Foundation of Employee Benefit Plans found employers naming catastrophic claims (32%) and specialty prescription drugs (21%) as the leading drivers, with GLP-1s cited by 67% of employers, autoimmune and inflammatory therapies by 54%, cancer drugs by 42% and cell and gene therapy by 21%.³

Provider consolidation and claims-system automation. Mercer's 2027 list adds hospital and physician-group consolidation strengthening providers' negotiating leverage, and — a newer entry — AI-enabled physician software that submits more claims.¹ Aon names provider adoption of AI for clinical documentation and coding in the same vein.⁴

The federal actuaries do not agree

The consultancies are not the only forecasters in this market, and the other one produces markedly lower numbers.

CMS's National Health Expenditure projections, published in June 2026, expect private health insurance spending to grow 5.0% per year on average over 2025–34, with total national health spending growing 5.4% a year against GDP growth of 4.1%, lifting health spending from 18.0% of the economy in 2024 to 20.6% in 2034 and $9.0 trillion.¹⁰ CMS expects national health spending growth to slow to an average of 4.9% a year in 2027–28 — precisely the years the benefits consultancies are calling the steepest in two decades.¹⁰ The Peterson-KFF Health System Tracker's reading of the previous vintage of the same CMS projections put private insurance spending per enrollee growing about 6.1% a year in 2025 and 2026.¹¹

Some of the gap is definitional. CMS measures aggregate national spending by all private insurance, including the individual market, where it expects direct-purchase enrolment to fall by 3.7 million in 2026 as enhanced marketplace subsidies expire; falling enrolment drags aggregate spending down even when cost per person rises.¹⁰ Its 2027–28 slowdown is also driven substantially by declining Medicaid enrolment following the One Big Beautiful Bill Act's community engagement requirements — a public-programme effect that says nothing about employer plans.¹⁰ The consultancies, by contrast, measure cost per employee among large employers.

Even allowing for all that, a 5.0% aggregate private-insurance trend and a 9.5%-to-11.1% per-employee employer trend are hard to reconcile, and neither side's published methodology closes the gap. Anyone quoting one of these numbers should know the other exists.

What the headline numbers leave out

The per-employee figure is not what an employee pays. Aon's 2026 breakdown is unusually explicit: average employer cost of $14,432 per employee, plus employee premium contributions of $3,130 and employee out-of-pocket spending of $2,167, for a total employee cost of $5,297.⁴ The widely quoted plan-cost figure is the first two added together — $17,562.³ The $2,167 that employees pay at the point of care is outside it. Every time a forecaster reports a lower headline because employers raised deductibles, part of that reduction reappears in a number the headline does not contain.

Aon's own published figures do not fully reconcile. Its 2025 release put 2025 average total plan cost at $15,860;⁶ an 8.3% rise would imply about $17,180 for 2026, while the 2026 components it published sum to $17,562.⁴ Aon's sample also grew between the two releases, from 1,000-plus employers and $120 billion of spend to 1,100-plus and $135 billion.⁶⁴ A changing sample is a reasonable explanation, but it means the level figures and the growth rates are not measuring an identical population.

Most of these are preliminary and self-reported. Mercer's 8.2% comes from early responses to a survey still in the field as of 10 August 2026;¹ WTW's is a preview of results not due in full until September 2026.² These are employers' expectations of their own costs, collected before the plan year begins — not adjudicated claims.

The five-year picture is less dramatic than the one-year one. KFF's Employer Health Benefits Survey, the main independent measure of what employers and workers actually paid, put the 2025 average annual premium at $9,325 for single coverage and $26,993 for family coverage, up 5% and 6% respectively, with workers contributing $6,850 toward family coverage. Over five years, family premiums rose 26% — against wage growth of 28.6% and inflation of 23.5%.¹² On that measure, premiums have recently grown more slowly than pay. KFF's survey of 1,862 firms is also the slowest-moving source here: fielded January to July 2025 and published in October 2025, it lags the consultancies' forecasts by more than a year, which is precisely why the forecasts get quoted instead.

How to use these numbers

Check the basis before comparing two forecasts. If one figure is before plan design changes and the other is after, they are not competing estimates and the difference between them is not a disagreement — it is the cost-shifting assumption. Ask which column you are reading.

If you are an employee rather than an employer, the before-changes number is closer to your experience. The published, lower figure is achieved by moving cost to you; a plan whose cost trend was cut from 11% to 8% did not get cheaper, it got redistributed. Watch the deductible and out-of-pocket maximum in your open enrolment materials, not the trend number in the news.

Treat a September projection as provisional. Mercer's 2026 figure moved from 6.5% to 6.7% between its preliminary release and its later survey material,⁷⁹ and Aon's status-quo projections have landed above the realised figure in each of the last two years.⁸⁶⁴ Wait for KFF's annual survey if you want to know what actually happened rather than what was expected to.¹²

And keep the federal projection in view. When benefits consultancies forecast 9.5% to 11.1% and CMS actuaries forecast 5.0%, the honest position is that the near-term direction is well corroborated and the magnitude is not settled.¹⁰

Footnotes

1. https://sjodaily.com/2026/09/04/employer-health-benefit-costs-projected-to-rise-8-2-in-2027-mercer-survey-finds/ — SJO Daily, "Employer Health Benefit Costs Projected to Rise 8.2% in 2027, Mercer Survey Finds" (published Sep 4, 2026), reporting preliminary results of Mercer's 2026 National Survey of Employer-Sponsored Health Plans. Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵

2. https://www.insurancebusinessmag.com/us/news/benefits/wtw-projects-the-steepest-healthcare-cost-increase-in-nearly-two-decades-587155.aspx — Insurance Business, Mark Rosanes, "WTW projects the steepest healthcare cost increase in nearly two decades" (published Aug 24, 2026), reporting a preview of WTW's 2026 Best Practices in Healthcare Survey. Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴

3. https://www.planadviser.com/2027-employer-healthcare-costs-projected-to-grow-up-to-11/ — PLANADVISER, Emily Boyle, "2027 Employer Healthcare Costs Projected to Grow up to 11%" (published Aug 26, 2026), reporting projections from Business Group on Health, the International Foundation of Employee Benefit Plans, Aon and WTW. Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵

4. https://aon.mediaroom.com/2026-08-20-Aon-U-S-Employer-Health-Care-Costs-Continue-Multi-Year-Climb,-Projected-to-Rise-9-5-in-2027 — Aon plc, "Aon: U.S. Employer Health Care Costs Continue Multi-Year Climb, Projected to Rise 9.5% in 2027" (published Aug 20, 2026). Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

5. https://www.shrm.org/topics-tools/news/benefits-compensation/employers-face-95-healthcare-cost-increase-2027 — SHRM, Kathryn Mayer, "Employers Face 9.5% Healthcare Cost Increase in 2027" (published Aug 21, 2026), reporting Aon's projection and GLP-1 prevalence figures. Accessed Sep 16, 2026. ↩ ↩²

6. https://aon.mediaroom.com/2025-09-10-Aon-U-S-Employer-Health-Care-Costs-Expected-to-Rise-9-5-Percent-in-2026 — Aon plc, "Aon: U.S. Employer Health Care Costs Expected to Rise 9.5 Percent in 2026" (published Sep 10, 2025). Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

7. https://www.mercer.com/en-us/about/newsroom/employers-are-bracing-for-the-highest-health-benefit-cost-increase-in-15-years/ — Mercer, "Employers are bracing for the highest health benefit cost increase in 15 years, a projected 6.5% increase in 2026, according to Mercer" (published Sep 4, 2025), reporting a survey of more than 1,700 US employers fielded Jun 11 – Aug 12, 2025. Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

8. https://www.prnewswire.com/news-releases/aon-us-employer-health-care-costs-projected-to-increase-9-percent-next-year-302223205.html — Aon plc, "Aon: U.S. Employer Health Care Costs Projected to Increase 9 Percent Next Year" (published Aug 15, 2024). Accessed Sep 16, 2026. ↩ ↩² ↩³

9. https://www.mercer.com/en-us/insights/total-rewards/employee-benefits-strategy/survey-on-health-and-benefit-strategies-for-2027/ — Mercer, "Survey on Health & Benefit Strategies for 2027". Accessed Sep 16, 2026. ↩ ↩²

10. https://www.cms.gov/files/document/nhe-projections-forecast-summary.pdf — US Centers for Medicare & Medicaid Services, Office of the Actuary, "Forecast Summary: Major Findings for National Health Expenditure Projections 2025-2034" (published Jun 17, 2026). Accessed Sep 16, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵

11. https://www.healthsystemtracker.org/chart-collection/how-much-is-health-spending-expected-to-grow/ — Peterson-KFF Health System Tracker, "How much is health spending expected to grow?" (updated Aug 4, 2025), citing an earlier vintage of the CMS National Health Expenditure projections. Accessed Sep 16, 2026. ↩

12. https://www.kff.org/health-costs/2025-employer-health-benefits-survey/ — KFF, "2025 Employer Health Benefits Survey", based on 1,862 firms surveyed January–July 2025 (published Oct 22, 2025). Accessed Sep 16, 2026. ↩ ↩²

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