What your CFO thinks about your health program: New survey results
The results of Mercer’s new survey of 161 CFOs and other finance professionals — The CFO Perspective on Health — couldn’t be more timely. With health benefit cost growth now running at about double the rate of general inflation and the average health benefit cost per employee expected to top $18,500 this year, it’s not surprising that about three-fourths of CFOs indicated healthcare costs are at least a top-five concern relative to other operating costs. For 33%, they rank in the top three. The fact that inflation for other goods and services has subsided over the past year, while health benefit cost growth has not, has raised red flags in more than a few C-suites.
The survey results make clear the far-reaching impacts of rising health benefit costs, both for the US economy and for individual organizations. Higher spending on healthcare can dampen employee wage growth and contribute to price increases for products and services, negatively affecting general inflation and affordability. In any given organization, it can slow hiring and crowd out capital investments, pressuring growth. Only about one in four CFOs said that their organization was able to absorb the cost increases over the past two years without any of these business impacts.
Cost management strategies
When asked what types of cost controls they would like to see in their health programs over the next few years, 45% of CFOs favored a strong emphasis on plan design changes, such as raising deductibles. Despite concerns about healthcare affordability, CFOs may feel that passing on some additional costs to employees is unavoidable in the current environment. Somewhat fewer (38%) support a strong emphasis on raising employees’ premium contributions, which would hit everyone’s paycheck whether they use healthcare or not.
Slightly more CFOs expressed strong interest in pursuing cost management strategies that don’t shift cost to employees. Offering plans with curated providers, such as high-performance networks or variable copay plans — a strategy that addresses the big differences that exist in provider costs and quality — got solid support from 47% of CFOs. About the same number want to emphasize clinical management, another way to control costs without making employees pay more.
As most CFOs recognize, a multi-pronged approach will be needed to successfully manage cost in the coming years. However, only about a third of CFOs (35%) say they are confident that long-term cost-management investments, such as clinic management programs, are producing a positive return. A note of caution to HR and benefits managers: As investment decisions come under closer scrutiny amid tightening budgets, it will be essential to have metrics in place to measure program performance and demonstrate value.
Seeking greater predictability with a defined contribution strategy
For CFOs attempting to manage a company budget, a big challenge with regard to health benefit costs is their unpredictability. The great majority of CFOs with self-funded plans (77%) report that healthcare is less predictable than other expenses. Healthcare claims have become increasingly volatile in recent years, due to the ongoing introduction of extremely expensive new gene and cellular therapies and as well as a shift to higher-cost treatments and medications, such as GLP-1s. Cost volatility is also a concern for fully insured employers; although their expenses may be fixed for a 12-month period, renewals can bring unexpectedly large increases.
Given this volatility, it’s not surprising that about two-fifths of the CFOs surveyed indicated they are at least interested in exploring defined contribution approaches to funding employee health insurance, although only 6% are “very interested.” Fully insured employers are more likely to be “very interested” in defined contributions than self-funded employers — 14% vs. 4%. One such approach — subsidizing health insurance through an Individual Coverage Health Reimbursement Arrangement (ICHRA) — is being widely promoted in the market and frequently discussed in the media. Company leadership is increasingly open to exploring all potential cost-mitigation strategies, even if only in passing, to ensure they consider every option as they seek to mitigate the impact of rising costs. Benefits professionals should, at a minimum, become familiar with the core opportunities and challenges of this approach and its implications from a competitive perspective.
Finally, we asked CFOs whether they receive the right information to monitor health costs effectively, and most believe they do. Still, with cost trends so high and predictability so challenging, it’s important for the benefits and finance departments to communicate frequently as the 2027 plan year approaches, to ensure each understands both business imperatives and healthcare market realities.
Mercer’s survey, The CFO Perspective on Health, was conducted in February 2026. The report is available here. In addition to the results discussed above, the report covers budget management for self-funded plans (including margins, reforecasting, expense allocation, and risk tolerance), and how fully insured employers evaluate a move to self-funding.
