How Employers Can Get Ahead of the Biggest Health Cost Jump in 15 Years

Published June 21, 2026

If you run a business with more than a handful of employees, you have probably already heard the number. Employers are bracing for health benefit costs to rise 6.5 percent in 2026, the sharpest jump in fifteen years, according to Mercer's latest survey of employer sponsored health plans. PwC's own research puts the number even higher, projecting an 8.5 percent rise in medical costs for the year. Either way, the message is the same. 2026 renewals are going to hurt more than usual, and June is exactly the right time to start doing something about it, months before your renewal notice lands on your desk.

Here is what is driving the jump, and why it is not just an insurance company problem. This is the fourth year in a row of unusually high cost growth, following a decade where increases averaged only about 3 percent a year. Rising medical claims, more expensive specialty drugs, and shifting utilization patterns are pushing costs up faster than most employers can absorb. Left unmanaged, Mercer estimates this year's increase would have been closer to 9 percent. It is only holding at 6.5 percent because more employers are actively managing their plans instead of simply paying the bill.

That is the part worth paying attention to. Nearly six in ten employers, 59 percent, say they will make cost cutting changes to their health plans in 2026, up sharply from 48 percent the year before. The problem is that the most common move is also the one that hurts the most: raising deductibles and shifting more of the cost onto employees. Mercer expects employee paycheck deductions for health coverage to climb another 6 to 7 percent this year on top of everything else. That is a real number on a real paycheck, and it is the kind of thing that quietly shows up in retention numbers a few months later.

There is another way. Rather than shifting cost onto your team, the employers coming out ahead are the ones managing the plan itself: reviewing claims patterns, catching high cost claims before they spiral, and rethinking how the plan is built so employees can get everyday care more easily. That is exactly the work behind our Employer Health Cost Strategy. We take a real look at your claims, your plan design, and how your team actually uses their benefits, and build a plan that slows your cost trend without quietly taking value away from your people.

If your renewal is not until January, June still matters. A plan built and negotiated in the fall under time pressure rarely turns out as well as one built with six months of lead time. If you have not looked closely at your health plan since last year's renewal, now is the moment.

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