A third of chief financial officers now view increased health benefit costs as a “top three” concern relative to other expenses—up from 19% in 2024, a new survey from Mercer found.
The consulting firm surveyed finance leaders from 161 organizations in February for the 2026 CFO Perspective on Health report. While most surveys were completed by CFOs or someone with health budget oversight, the report notes all respondents are referred to as CFOs for convenience.
Moreover, only one in four CFOs said they were able to absorb benefit cost increases without business impacts over the past two years. Respondents report the following impacts from increased health benefit costs:
- Reduced spending on other benefits: 38%
- Slower wage growth: 36%
- Increased prices for products and services: 26%
- Layoffs and reduced hiring: 22%
- Reduced investment: 19%
The report notes that CFOs were more likely to express strong concern about expensive new treatments (66%) when asked about cost drivers, followed closely by aging workforces (57%), healthcare system consolidation (53%), GLP-1 drugs (47%) and funding cuts (46%).
The results echo findings from Mercer’s November National Survey of Employer-Sponsored Health Plans. Respondents said they expect to see health benefits rise by 6.7% in 2026, reaching more than $18,500 per employee on average—up from $17,964 in 2025.
Most respondents also report that annual health benefit cost increases above 6% are not sustainable over the next three years, though analysts note that level seems likely.
“Companies will need to consider more aggressive tactics than they may have used in the past to achieve sustainable cost growth,” Sunit Patel, Mercer US’s Chief Health and Benefits Actuary, said in a statement. “Because bending the trend by even one or two percentage points often requires significant effort, the wide variation in CFOs’ responses highlights the importance of knowing your organization’s cost targets to ensure alignment between the finance and benefits departments and the company’s strategic roadmap.”
Fifty-three percent of respondents said they are “not confident” that long-term cost management strategies for health benefits that require investment are saving money. Similarly, 45% report that plan design changes, such as deductible increases, should be emphasized in cost management strategies—though 38% were less likely to “strongly favor” employee premium contributions.
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.
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.
Given volatility and amid increased costs, 42% of CFOs report interest in at least exploring defined contribution approaches. 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.
“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,” the report said. “Benefits professionals should, at a minimum, become familiar with the core opportunities and challenges of this approach and its implications from a competitive perspective.”