Health care costs are predicted to rise by 9.5 percent in 2026 to more than $17,000 per employee, Aon said. In addition to escalating costs to treat chronic health conditions, employee health care costs are rising due to expansions among health care providers’ networks that allow them to see higher volumes of patients, Aon said.
Increased use of brand-name and expensive specialty medications—specifically, high-demand GLP-1 medications such as Wegovy, Mounjaro, and Zepbound that are used to treat adult obesity—is spearheading the rise in prescription drug costs, Aon noted.
Farheen Dam, Aon’s head of health solutions for North America, said that although medical cost inflation levels are at their highest point in years, it’s up to employers to enact cost-control measures.
“[Employers] absorb the bulk of the increase while making smart, targeted adjustments that protect employees and preserve plan value,” Dam said.
“We help employers navigate this volatility by identifying emerging risks within their employee health data, enabling them to make more resilient decisions on behalf of their workforce through predictive analytics and proactive planning.”
Although employers are expected to shoulder the majority of health care cost increases in 2026, rising health care expenditures at the company level are likely to lead to higher employee payroll deductions for medical premiums and changes to employer-sponsored health care plans, Aon said.
Medical inflation also hampers companies’ ability to invest in other important employee-satisfaction initiatives, such as higher compensation, career development, and well-being initiatives.
The continued rise in health care costs has changed the conversation over time from a benefits challenge to an overall workforce strategy issue, Dam noted.
“This data is a powerful example of how we help employers understand the ripple effects of rising medical spend, not just on plan design, but on their ability to invest across total rewards and broader people priorities,” she said.
Overall employer health care costs, as well as the amount of costs shared between employers and their employees, vary by industry. For instance, employer health care cost increases were highest in the technology and communications sector, which saw an average jump of 8.8 percent between 2024 and 2025, Aon reported. Employee costs, meanwhile, were highest in the finance and insurance industry at 6.8 percent.
According to Aon, overall employee health care expenses in 2025 are predicted to tally around $5,000—just under $3,000 for paycheck premium deductions, with an additional $2,000 in out-of-pocket expenses for deductibles and copays.
Health care costs are projected to remain elevated beyond 2026, Aon said, due to changes in the health care landscape and continued external economic pressures. Debbie Ashford, Aon’s North American chief actuary for health solutions, said employers can turn to data analytics to better manage and enact health care cost solutions, as well as reduce their risk profile.
“Employers are facing a future of persistent cost pressure,” Ashford said. “By combining actuarial rigor with predictive analytics, we’re helping organizations move from reactive budgeting to proactive risk management.”
