Employer Health Plan Expenses Set to Jump in 2027: How to Shop and Save

Aon expects employer health costs to climb 9.5% in 2027, while lawsuits say some workers paid more for plans with the same benefits.

It is once again the season when Americans select health insurance for the coming year, and advisers say this is not the time to simply let auto-enrollment decide for you.

A 2024 survey by financial services firm Voya found that nearly half of Americans spend less than 20 minutes reviewing workplace benefits information, and 91% stick with the same plan each year. Health care experts say this should be the year to take a closer look, because the effort could pay off.

According to insurer Aon, U.S. employer health care costs are expected to increase 9.5% in 2027, lifting average costs to more than $19,000 per employee and extending a run of nearly double-digit increases for a fourth consecutive year. Employers looking to manage those costs may reduce benefits or raise premiums and deductibles. Aon said workers in 2026 pay an average of $5,297 for coverage, including $3,130 in payroll contributions and $2,167 in out-of-pocket costs, which is nearly 8% higher than in 2025.

“Health insurance has changed a lot,” said Michael Botta, founder and chief executive of health care marketplace Sesame. “It used to be more generous. If you pay more, you get more. Now, it’s more like catastrophic insurance. You pay everything upfront for all your care and insurance kicks in only if you spend more than $10,000 per year. It’s looking more like insurance in any other market.”

If health insurance costs are rising, is it still worth comparing plans?

Yes, advisers say. Reviewing options can still save money because plans are not identical and health needs vary from person to person.

Many employers now offer a high-deductible health plan, or HDHP, that can be paired with a Health Savings Account, known as an HSA. These plans generally have lower premiums but higher deductibles. Workers can set aside pre-tax money in an HSA and invest it, and employers may also contribute. Money withdrawn for qualified expenses is tax free.

An HDHP may be a good fit for someone who is generally healthy and expects only routine doctor visits. But people who anticipate procedures or manage chronic conditions that require costly medications or specialists may want a plan with a lower out-of-pocket maximum, said Lindsay Theodore, senior manager of thought leadership at T. Rowe Price.

Doesn’t my employer already negotiate the best rates?

Employer-sponsored coverage is usually a solid deal for workers, in part because companies help subsidize the cost of insurance.

Even so, recent lawsuits suggest that employers can still offer plans with major pricing differences that may have a real impact on employees’ budgets.

Earlier this year, employees sued Abbot Laboratories, saying the company knowingly offered two health plans with identical benefits, but one cost workers significantly more and that difference was not disclosed. Workers at Northwestern University filed a similar lawsuit against the school. In both cases, employees alleged breach of fiduciary duty and said they were overcharged for insurance.

“It’s tough for employees to figure out themselves (the costs), which is why employers have a fiduciary duty – the highest duty under the law to do what’s best for employees or beneficiaries,” said Andrew Schlichter, co-managing partner of Schlichter Bogard and counsel for the employee class in the Abbott case. “Employers have all the information, not employees. They just get open enrollment forms and options. Employees ended up paying more than they had to, and that can really affect their bottom lines.”

How can workers find the best health plan?

Advisers suggest keeping the following points in mind when comparing coverage:

• Do not assume the first option, or the most expensive one, is automatically the best.
• Work out the full cost of each plan: premium plus deductible, out-of-pocket expenses, and any copayments or coinsurance. It also helps to look at the out-of-pocket maximum, which is the most you would pay before insurance covers 100% of eligible services, to understand the worst-case scenario.
• Check prescription coverage if you or anyone covered by the plan takes medication. Even if medical costs are manageable, a costly drug plan can strain a budget. Prescription coverage has separate rules, so confirm whether your medicines are included and how they are covered. For a new or brand-name drug, some plans may require you to pay the full price until the deductible is met before lower copays or coinsurance begin.
• Read the details carefully, including the fine print, so you understand what is covered and what it will cost.
• Ask your company’s benefits representative or the health insurer if anything is unclear.