Our Take
Employers are splitting the difference: pushing costs onto workers while buying loyalty with fertility, childcare, and mental health support—a sign that raw benefit cuts no longer stick without cushioning.
Why it matters
If you manage benefits, negotiate with insurers, or design employee packages, this is the playbook large employers are moving toward. If you're an employee, understand what your employer is likely planning before open enrollment.
Do this week
Benefits leaders: audit your 2027 plan changes against the Mercer data this week so you can model employee impact and prepare communication before announcement season begins.
48% of employers plan cost shifts
Nearly half of U.S. large employers (those with 500+ employees) will raise deductibles or co-pays in 2027, according to a Mercer survey (per Mercer). Overall health benefit costs are projected to increase 6.7% next year, pushing the average cost above $18,500 per employee. Prescription drugs alone are expected to rise about 9% in 2026.
The cost pressure is forcing a broader redesign. 31% of large employers are offering or planning non-traditional medical plans by 2027, often featuring reduced cost-sharing when members use preferred provider networks. Another 38% are considering them. In the pharmacy space, employers are tightening controls: 27% have tightened or plan to tighten utilization controls on drugs like GLP-1 medications for weight loss, with 6% dropping coverage entirely in 2026 and another 5% planning cuts in 2027.
The strategy isn't purely defensive. 50% of large employers now offer IVF coverage, jumping to 77% among those with 20,000+ employees. Adoption assistance (46%), surrogacy support (25%), childcare resources (51%), and eldercare benefits (58%) are expanding. Financial counseling, debt support, and mental health services are also being added, reflecting employer recognition that financial strain is the top employee concern.
Employers are buying peace with selective generosity
The pattern is clear: traditional cost-sharing (higher deductibles, narrower networks) continues, but employers are pairing it with high-touch, high-visibility benefits that signal care. Fertility coverage and caregiving support are expensive but emotionally resonant. Financial wellness services and mental health support address the anxiety that cost-shifting creates.
This is not a company-wide benefit expansion. It's strategic: employers are betting that targeted support in high-friction areas (family building, aging parents, debt stress) will retain talent while overall plan costs shift to workers. The Mercer quote captures it: managers 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." (per Mercer)
The GLP-1 pullback is also significant. Coverage peaked at 49% last year but is now being unwound or restricted. Employers are testing whether members will tolerate access limits on a high-demand drug when alternatives (counseling, financial incentives to use lower-cost providers) are offered instead.
What to do with this data
Benefits leaders should compare your 2027 plan against the Mercer benchmarks: are you raising cost-sharing in line with peers? Are you offsetting with caregiving or financial benefits? If you're ahead on one front but behind on another, you have a retention and morale gap to close.
If you're negotiating pharmacy or medical contracts, use this to pressure vendors on transparency and value-based pricing. Employers are explicitly demanding "more transparency, control and confidence that every dollar spent is delivering maximum value" (per Mercer), which means no more black-box rebate arrangements.
Employees and job hunters: ask about 2027 plan changes and what your employer is adding (not just cutting). The Mercer data shows that half of large employers are still offering IVF, 77% are adding childcare resources, and most are expanding mental health support. If your employer is raising costs without these offsets, they're out of step with peers.