Managing Healthcare Costs Without Hurting Employees: HR's 2027 Challenge
Open enrollment may feel far away — but it isn't. Summer is when benefits planning for 2027 starts taking shape. With health benefit costs continuing to outpace wages and inflation, employers who start planning now have more flexibility to control costs without pushing the burden onto employees. The decisions made in the coming months will shape workforce health, retention, and productivity well into the next year.
In April and May, Mercer surveyed 604 U.S.-based organizations and found a pattern that has become all too familiar: when healthcare costs rise, many employers pass more of the bill to employees. But that's a short-term fix with a long-term cost. When employees struggle to afford care, they may delay or forgo treatment entirely — leading to higher claims costs, increased absenteeism, and elevated turnover.
"Employers are using different levers to manage costs — both traditional cost-sharing tactics and strategies that guide their people to higher-value care and provide support where it can have the greatest impact."
— Simon Camaj, US Health Leader, MercerA Familiar Cost-Shifting Pattern
According to Mercer's Survey on Health and Benefit Strategies for 2027, shifting more healthcare costs to employees remains one of the most common employer responses to rising benefit expenses. Nearly half (48%) of large employers — those with 500 or more employees — plan to raise deductibles or out-of-pocket maximums for 2027. While administratively convenient, this approach transfers financial pressure directly to workers, particularly those in lower wage brackets who are already stretched thin.
But employers are also beginning to look beyond cost-shifting. Nearly one-third (31%) of large employers either currently offer a non-traditional medical plan — such as a high-performance network or variable copay plan — or plan to offer one in 2027. Another 38% are actively considering one of these approaches. High-performance network plans typically cost employees less when they choose doctors and hospitals from a preselected, value-optimized network.
A 9% Medical Cost Trend — For the Fifth Straight Year
Health plan actuaries are projecting a 9% medical cost trend for 2027 — and that's after PwC revised its 2026 estimate upward to 9% as well, according to the firm's annual Behind the Numbers report. For the fifth consecutive year, costs are running well above both inflation and wage growth. The question isn't whether costs will rise. It's how HR responds — and how quickly planning begins.
"Coverage without clinical follow-through tends to drive up claims costs over time — and GLP-1 prescriptions have nearly doubled in the past year alone."
— Maven Clinic, Beyond the Script ReportGLP-1 Medications Are Forcing Hard Choices
Pharmacy costs are rising even faster than medical costs, driven largely by the near-doubling of GLP-1 prescriptions in the past year alone. At around $1,000 per patient per month, even modest employee uptake creates real budget exposure. Compounding the problem, 41% of providers report they don't have enough visit time to support patients after prescribing GLP-1 medications — meaning coverage without adequate clinical follow-through often leads to higher claims down the road.
According to the Mercer survey, 6% of large employers dropped GLP-1 obesity coverage in 2026, and another 5% are planning to or actively considering it for 2027. Twenty-seven percent have tightened utilization controls through prior authorization, narrowed eligibility criteria, and closer scrutiny of pharmacy benefit manager relationships. If GLP-1 coverage is in your benefits package, it warrants its own line in your budget review — not just a passive renewal assumption.
Financial Stress and Caregiving: The Hidden Cost Centers
When employers raise deductibles and out-of-pocket costs, financial pressure doesn't disappear — it transfers to employees. Mercer's 2026 Inside Employees' Minds survey found that covering monthly expenses is now the top concern among U.S. workers, particularly lower-paid employees. That financial stress surfaces in lost productivity, absenteeism, and turnover — costs that often exceed the benefit savings employers were trying to capture.
Sixty percent of large employers now offer financial wellness benefits such as one-on-one financial counseling, and 21% offer debt support programs. Meanwhile, return-to-office requirements are colliding with a workforce managing school-age children and aging parents. Mercer's data shows 51% of large employers plan to offer at least one childcare resource in 2027, while 58% provide at least one elder care benefit. Employers investing in caregiver support have done the math — the benefit costs less than the turnover it prevents.
Start 2027 planning now. Summer is when benefits strategies take shape. Employers who engage early have more flexibility to control costs without sacrificing coverage quality or employee trust.
Cost-shifting has limits. Nearly half of large employers plan to raise deductibles for 2027, but pushing expenses to employees risks delayed care, higher claims, and increased turnover — ultimately costing more.
GLP-1 drugs demand a dedicated strategy. At ~$1,000/patient/month and with rapidly growing uptake, GLP-1 medications require their own budget line, utilization controls, and a clinical follow-up plan — not a passive renewal assumption.
Financial wellness is a business priority. With covering monthly expenses now the top worker concern, employers expanding financial counseling and debt support are protecting productivity and reducing stress-driven absenteeism.
Caregiver benefits reduce attrition. Over half of large employers are adding childcare and elder care resources in 2027 — not out of generosity, but because the ROI on preventing caregiving-driven turnover is clear and measurable.