Employee health costs are likely to surpass $5,000 next year as companies see their biggest cost increases in at least five years, according to projections from Aon.
getty
Employee health costs are likely to surpass $5,000 next year as companies see their biggest cost increases in at least five years, according to projections from Aon.
A new report out earlier this week from Aon shows total employee costs at $4,920 for this year, which is about 5% more than $4,662 in 2024. The total figure for 2025 includes $2,967 in employee premiums deducted from worker paychecks – or about $114 per biweekly pay period – and another $1,953 in projected out-of-pocket costs.
But Aon’s report projects total U.S. employer health care costs projected to rise 9.5 percent in 2026, “exceeding $17,000 per employee.” Aon’s percentage increase projection is similar to an earlier report from rival benefits consultancy Mercer, which projected “total health benefit cost per employee is expected to rise 6.5% on average in 2026 – the highest increase since 2010,” according to its report.
Aon, which says such costs per employee are $15,860 this year, said its “total plan costs represent the employer’s and employee’s combined premiums for medical and prescription drug costs but exclude employee out-of-pocket payments such as deductibles, co-pays and co-insurance.”
The Aon report didn’t break down the 2026 employee share of the total premium or out-of-pocket costs but based on the percentage increase for total employer costs, the employee share for next year will easily jump past $5,000 for the first time, based on Aon’s 2026 projection for the total plan cost.
The premium and out-of-pocket costs for 2026 are the kind of figures employees who work at big companies will first see during open enrollment, the annual period of time when employers allow their workers to select, change or keep benefit plans for the following year. Depending on the company, open enrollment starts as early as September and can run into November, benefits consultants say.
The data for the Aon report and related projections come from Aon’s Health Value Initiative database, which includes cost information from more than 1,000 U.S. employers representing 7.7 million workers.
“This data is a powerful example of how we help employers understand the ripple effects of rising medical spend, not just on plan design, but on their ability to invest across total rewards and broader people priorities,” Farheen Dam, head of Health Solutions for North America at Aon said in statement accompanying the report.
Reasons for the cost increases vary but include more Americans taking high priced GLP-1 weight loss drugs and the continuing rise in people with chronic conditions, “such as musculoskeletal and cardiovascular disease, alongside an increase in high-cost conditions like cancer,” the Aon report says.
Source: https://www.forbes.com/sites/brucejapsen/2025/09/13/employee-share-of-health-costs-to-eclipse-5000-next-year/
