Annual employer health benefit costs are projected to rise 8.2% in 2027, the largest increase in employer health spending since 2003, according to Mercer, a financial consulting firm. Costs have been trending higher since 2022 amid ongoing cost restraints and more expensive improved therapeutics. Mercer also pointed to provider consolidation, which strengthens negotiating leverage over insurers, as well as slower growth in government healthcare funding, pressure from uncompensated care and higher provider charges. AI-enabled software is helping submit more and higher-level claims, while disputes tied to the No Surprises Act of 2022 have exceeded expectations. Employers surveyed by Mercer identified managing high-cost claims and measuring health-plan performance as leading strategies. The projection is broadly consistent with Aon’s forecast of a 9.5% increase in U.S. employer health costs in 2027, equivalent to an average additional $19,000 per employee.