Mercer’s the CFO perspective on health
Mercer’s National Employer-Sponsored Health Plans Survey found that health benefit cost growth will accelerate to a 15-year high in 2026. The projected increase of 6.7% — more than double general inflation — is putting increasing pressure on budgets and operations. Today’s cost drivers include:
- Wage inflation and health system consolidation
- Public plan budget constraints shifting costs to private plans
- New costly treatments altering service mix and utilization
- Increased claims volatility for self- and fully insured sponsors
Not surprisingly, CFOs are paying more attention to their organization’s healthcare expenses and cost mitigation strategies than in the past. Our survey was designed to discover their views on safeguarding healthcare affordability for employees while maintaining sustainable cost growth for the organization.
Key insights from the survey results:
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A third of CFOs now rank health benefit cost as a “Top 3” operating expense concern, up from 19% in 2024.
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CFOs say health cost growth has impacted their businesses in a number of areas, including other benefits (38%), wage growth (36%), and prices of products/services (26%).
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Most CFOs say annual cost increases above 6% over the next 3 years would not be sustainable — yet this level of cost growth seems likely.
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More CFOs favor plan design changes than favor contribution increases to manage cost growth.
Implications:
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Healthcare costs require greater C-suite focus and financial alignment.
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Employers are reassessing margin, risk tolerance, and cost management strategies, including self-funding.
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A multi-pronged approach — encompassing benefit design, network strategies and clinical case management — will be needed to control costs while maintaining affordability.
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Collaboration between finance and benefits teams is especially important in a volatile cost environment.
To discuss how these insights affect your organization and explore tailored strategies, please contact your Mercer representative or reach out to us today. We're here to help you navigate these challenges.
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