Employer health benefit costs are on track to rise 8.2% in 2027, the steepest increase in 24 years, even after employers take steps to contain them. Without action, the projected increase would be 11%, according to preliminary findings from Marsh's National Survey of Employer-Sponsored Health Plans.
The 8.2% figure lands on top of four consecutive years of elevated cost growth. The average projected increase for 2026 was 6.7%, itself near the top of post-pandemic trend. The compounding effect is the number that matters most at renewal time.
The familiar long-term pressures, namely provider consolidation, advances in high-cost therapies, and cost-shifting from government programs, have not eased. What pushed 2027 into record territory are three newer factors, each adding approximately one percentage point to the overall trend, according to Marsh's actuaries.
The first is GLP-1 medications for weight management. These drugs have expanded well beyond their original diabetes indication into obesity, cardiovascular risk, and sleep apnea, expanding the pool of eligible patients and associated costs. Some employers have already dropped GLP-1 weight management coverage for 2027. That decision cuts the immediate cost line but creates a benefits gap that surfaces when competing for candidates whose current employer covers the drug.
The second driver is AI-enabled claims submission software. The technology helps physicians capture additional diagnoses and submit more precisely coded claims. More claims are processed, at higher levels, than before the system was in use. Marsh's actuaries flag this as a growing contributor to trend.
The third is the No Surprises Act's Independent Dispute Resolution (IDR) process. Designed to protect patients from unexpected out-of-network bills, it has become a high-volume arbitration system. Providers filed 2.6 million disputes in 2025 alone, against federal projections of roughly 22,000 per year, per Georgetown University research published in Health Affairs. Marsh's actuaries estimate IDR is adding a full percentage point to the 2027 cost trend. For self-funded plan sponsors, those claims flow through directly, and brokers advising them should be asking whether their stop-loss attachment points were set before IDR volumes reached this scale.
The pressure is already moving through to plan design. Marsh found that 59% of employers plan to make cost-cutting changes to health benefits in 2027. A separate Marsh survey of large employers found that about two-thirds expect to increase employees' share of premium costs next year.
One employer response worth tracking is the variable copay plan. Twelve percent of large employers plan to offer one in 2027, a figure that climbs to 18% among employers with 20,000 or more employees. Variable copay plans carry no or a low deductible and charge members less when they select higher-performing providers for specific services. The approach steers utilization rather than simply shifting cost.
The plan design shifts land directly in the renewal conversation. A client whose benefit structure has not changed in several years is heading into open enrollment against cumulative cost growth with no recent precedent. The 11% unmanaged increase gives the case for action a specific number. Clients who dropped GLP-1 coverage or moved to higher-deductible structures need help explaining why, not just announcing the change.
