The data: Health benefit costs are now a top-three operating expense concern for 33% of chief financial officers, up from 19% in 2024, according to a February report from benefits consulting firm Mercer that surveyed 161 CFOs whose companies partially or fully cover their workers' medical costs.

• Three-quarters (75%) of CFOs ranked healthcare costs as a top-five concern.
• 66% report being highly concerned about the high cost of new treatments (e.g., for cancer and rare diseases).
• Around half cite covering an aging workforce (57%) and GLP-1 obesity drugs (47%) as major cost concerns.

Why it matters: Rising health benefit costs are impacting employee benefits, wage and talent growth, and other business outcomes, per Mercer’s survey.

• More than one-third of CFOs said they’ve had to cut spending on other benefits (38%) or slow wage growth (36%).
• 22% report cutting hiring or conducting layoffs.
• 19% said they’ve reduced investments.
• Only 27% said they absorbed recent increases in healthcare costs without business impacts.

Meanwhile, CFOs see little relief ahead in controlling healthcare costs. Health benefit cost growth is expected to hit a 15-year high in 2026, per Mercer. More than half of CFOs say projected annual health benefit cost increases above 6% are unsustainable. Some 53% lack confidence that long-term, cost management strategies that require upfront investment are actually delivering savings.

Implications for employers and workers: C-suite business leaders bearing the financial burden of employee healthcare are panicking—and workers aren’t getting any relief either. The total healthcare bill for a family of four with an average employer-sponsored plan has climbed to more than $37,000 a year—and nearly $8,500 for an individual—according to a May report from Milliman. That figure includes employer premium contributions, employees’ share of premiums, and out-of-pocket costs, and is up 8% from a year ago.

Employers do have some cost-control options, including more aggressively promoting primary and preventive care to help workers avoid costlier health issues later on. They can also invest in digital health tools, and contract directly with drugmakers to gain greater transparency into the prices they pay for high-cost medications. At the same time, many companies will pursue cost-cutting measures that will be unfriendly to employees, such as raising premiums, pushing folks into high-deductible plans, limiting coverage for expensive therapies, and narrowing provider networks.

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