Health benefit costs for employer-sponsored plans are projected to rise by an average of 8.2 percent in 2027, the largest single-year increase since 2003, according to an Aug. 31 report from consulting firm Marsh. The increase is driven by several factors, including the growing use of expensive weight-loss medications and wider adoption of artificial intelligence tools that help providers submit more billable claims.
Workers at employer-sponsored plans are expected to absorb some of the increase. About two-thirds of large employers plan to raise employees’ share of premium costs in 2027, according to the report, while many are also considering higher deductibles and other changes that would increase out-of-pocket expenses. Marsh said employees could see their paycheck deductions for health coverage rise by more than the overall 8.2 percent average, depending on how the cost shift is structured.
The 2027 projection would mark the fifth consecutive year of elevated healthcare cost growth following a decade of more moderate annual increases. It would also be the steepest increase during that five-year stretch, up from a projected 6.7 percent increase in 2026.
What is driving the increase
The expansion of GLP-1 medications, including widely prescribed weight-loss drugs like Ozempic and Wegovy, has added significant expense to sponsored plans in recent years. These drugs can cost more than $10,000 per patient per year at list price, and as coverage of them has expanded, so has the share of healthcare spending they represent. The Marsh report identified GLP-1 coverage as a primary cost driver.
The AI billing factor is less visible but increasingly significant. Healthcare providers have adopted AI tools that assist with clinical documentation and billing, enabling more complete and systematic submission of claims for services that might previously have gone unbilled. The result is higher reimbursement requests and higher costs absorbed by these plans.
What employers are doing
Firms told Marsh that the cost of maintaining current benefit plans with no changes would rise by an average of 11 percent. The 8.2 percent projected increase reflects cost-containment actions already being planned, including plan design changes, network adjustments and benefit modifications.
Raising employee premium contributions is the most common approach. Higher deductibles shift cost to employees at the point of service. Some plans are also implementing or expanding prior authorization requirements for expensive treatments and specialty medications, including GLP-1 drugs.
What employees should watch for
Open enrollment decisions for 2027 coverage will carry more weight than in previous years. Employees choosing between plan tiers should model their expected healthcare usage carefully, since higher-deductible plans that look attractive based on premium savings alone may cost more in total if their actual healthcare use is significant.
Employees should verify whether their plan continues to cover these medications in 2027 and under what conditions, as some plans are adding prior authorization requirements or removing coverage as a cost-control measure.
The 8.2 percent employer healthcare projection is an average. Individual experience will vary significantly depending on company size, industry, geographic location and the specific plan changes implemented.
