The average cost of employer-sponsored health insurance reached $17,496 per employee in 2025, according to new findings from Mercer.
The institute’s 2025 National Survey of Employer-Sponsored Health Plans reports a 6% increase in costs, “well above” the rate of inflation and wage growth. The rise was due to prescription drug spending, growing 9.4% on average among plan sponsors with 500 or more employees.
A greater number of large employers also offered GLP-1 weight-loss medications in 2025, from 44% in 2024 to 49% this year, reports Mercer.
Plan sponsors afford these costs through a mix of premium contributions deducted from employee paychecks and plan design features that share some of the financial responsibility to plan participants. As these costs are split between employers and participants, concerns over healthcare affordability for the latter has sharply risen in past years. A 2024 study from HSA Bank found that 35% of respondents are concerned about paying healthcare costs today, while 36% worry over future medical expenses in retirement.
“Employers want to minimize increases in paycheck deductions while ensuring employees across all pay levels can afford the care they need, when they need it,” said Ed Lehman, Mercer’s US Health and Benefits leader. “It’s a tough challenge, but there are ways that employers can make healthcare more affordable for employees.”
Health benefit costs may continue to rise in the new year, as Mercer estimates an increase of 6.7% in 2026, or an average cost above $18,500 per employee.
To support affordability, Lehman says employers could offer additional medical plan options and provide specialized health programs to meet different needs and financial situations. For 2025, Mercer’s report shows that 67% of large organizations offered three or more medical plans at the largest worksite, up from 60% in 2023.
For example, Mercer reports that in preferred provider organization (PPO) plans offered by large employers, the average monthly premium contribution paid by employees is $191 for individual coverage, and the average deductible is $1,064. On the other hand, employees enrolled in high-deductible health savings accounts (HSAs) pay an average $109 monthly for coverage, but their deductible is higher at $2,481.
Looking ahead, employers are prioritizing healthcare plan performance. Seventy-seven percent of large businesses said they are prioritizing measuring the performance of health programs over the next three to five years.
“We expect this trend will continue, as these newer plans tend to cost less and offer more affordable benefits to the plan member,” said Tracy Watts, Mercer’s US leader for Healthcare Policy. “Employers have workforces with diverse needs. When employees choose the right plan for themselves, they can unlock savings.”