National Survey of Employer-Sponsored Health Plans
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2025 preliminary results are in...
Total health benefit cost per employee is expected to rise 5.8% on average in 2025, even after accounting for planned cost-reduction measures. Employers estimated that their cost would rise by about 7%, on average, if they took no action to lower cost. Smaller employers (those with 50-499 employees), which typically have fully insured health plans, have been hit the hardest. They reported that cost would rise by about 9% on average if they took no action to lower cost.
Based on these projections, 2025 would be the third consecutive year of health benefit cost increases above 5%, following a decade of cost increases averaging only around 3%. Meanwhile, general inflation has cooled, suggesting that other factors are contributing to the higher health benefit cost trend. What is the biggest driver of trend? Read more in the press release.
2025 would be the third consecutive year of health benefit cost increases above 5%
Employers estimated that their cost would rise by about 7%, on average, if they took no action to lower cost.
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Explore the 2023 findings
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Inflation catches up with healthcare
The average per-employee cost of employer-sponsored health insurance rose by 5.2% in 2023 to reach $15,797, and employers project another sharp increase for 2024. Because healthcare providers typically have multi-year contracts with health plans, inflation-driven cost increases are phasing in as contracts are renewed. -
Challenges for small employers
Cost increases were highest for small employers, who also reported a higher average per-employee cost for health insurance -- $16,464 compared to $15,640 among large employers. Large employers are able to self-fund their medical plans, avoiding insurance company risk charges, and typically also have more resources to devote to health program management. -
Rx plays a part
Medical breakthroughs have made drugs the fastest-growing component of plan cost for years, and in 2023 pharmacy benefit cost jumped 8.4%. New and ongoing developments in the pharmaceutical market seem likely to have a long-term impact on health benefit cost. -
Keeping healthcare affordable
Despite rising health plan costs, large employers largely avoided shifting additional costs to employees through higher deductibles or OOP maximums in 2023. Some are providing medical plan choices to accommodate different financial and medical situations, for example, a plan option with free employee-only coverage, or one with no deductible.
Health benefit cost per employee rose 5.2% in 2023
Change in total health benefit cost per employee compared to CPI
Annual change in total health benefit cost per employee:
2004 7.5%
2005 6.1%
2006 6.1%
2007 6.1%
2008 6.3%
2009 5.5%
2010 6.9%
2011 6.1%
2012 4.1%
2013 2.1%
2014 3.9%
2015 3.8%
2016 2.4%
2017 2.6%
2018 3.6%
2019 3.0%
2020 3.4%
2021 6.3%
2022 3.2%
2023 5.2%
Overall inflation
Beginning in 2020, survey results are based on employers with 50 or more employees. *Projected.
Source: Mercer's National Survey of Employer-Sponsored Health Plans, Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation, 1993-2023 (April)
Copyright© 2021 Mercer (US) Inc. All rights reserved.
Mercer National Survey of Employer-Sponsored Health Plans
Small employers hit with 7.8% increase in 2023, pushing cost well above $16,000 per employee
Average total health benefit cost per employee
All employers (50 or more employees)
2022 $15,013
2023 $15,797
+5.2%
Employers with 50-499 employees
2022 $15,278
2023 $16,464
+7.8%
Employers with 500 or more employees
2022 $14,948
2023 $15,640
+4.6%
Copyright© 2021 Mercer (US) Inc. All rights reserved.
Mercer National Survey of Employer-Sponsored Health Plans
Prescription drug cost is driving overall health benefit cost
Average annual change in cost per employee
2019
Prescription drug cost 4.9%
Total health benefit cost 3.0%
2020
Prescription drug cost 6.4%
Total health benefit cost 3.4%
2021
Prescription drug cost 7.1%
Total health benefit cost 6.3%
2022
Prescription drug cost 6.4%
Total health benefit cost 3.2%
2023
Prescription drug cost 8.4%
Total health benefit cost 5.2%
Copyright© 2021 Mercer (US) Inc. All rights reserved.
Mercer National Survey of Employer-Sponsored Health Plans
Boosting affordability
Employers with 500 or more employees
Helping employees keep more of their paychecks
15% Offer free employee-ony coverage in at least one medical plan
17% Use salary-based contributions
Removing financial barriers to seek care
39% Offer medical plan with no/low deductible (e.g., copay plan)
Providing cash to help pay for healthcare
6% Make larger HSA contributions to low-earners
Copyright© 2021 Mercer (US) Inc. All rights reserved.
Mercer National Survey of Employer-Sponsored Health Plans