Workplace health costs will take a major bite out of 2027 paychecks

It's open enrollment season for millions of workers making selections in their employer-based health insurance plans for 2027.

With healthcare costs a chief concern for Americans already clobbered by inflation, workers will also have to deal with higher monthly premiums, deductibles, and co-pays.

Most employers expect the steepest jump in healthcare costs in more than two decades.

"It's a grim story," Beth Umland, director of employer research for health and benefits at Marsh, told Yahoo Finance. "This is a big cost increase, and there's no getting around that."

What's pushing the higher health insurance costs?

Numerous factors are driving costs higher, including escalating costs for hospital care and prescription drugs, particularly cancer and GLP-1 drugs, as well as a high utilization of patient mental health services, said Matthew Rae, associate director of the Program on the Health Care Marketplace at KFF.

"Worker contributions to family health insurance premiums are only a small portion of the way in which workers pay for their healthcare," Rae added.

Workers pay through cost sharing as well, copays, co-insurances, and deductibles.

"All said, many people with job-based coverage will be chipping in a lot of money to pay for their healthcare next year, either through premiums or through all the costs when they actually use it," he said.

In addition to premiums rising, employees may see a jump in deductibles and other costs.

Workers are paying on average $7,471 annually toward family premiums this year, which is up 9%, or $621, from 2025, according to KFF.

The average deductible is 1,955 for single coverage; family deductibles vary widely by state and are typically over $4,000.

Including the employers' share, total annual premiums for family coverage now average $28,303, up 5% or $1,310 from 2025. Over the same period, wages rose 3.7% and general inflation rose 2.7%, though inflation has been higher in recent months.

"As high trends persist, we expect to see more employers looking for savings in their provider networks, either in terms of changing insurance carriers entirely, limiting choice within the network, or deploying mechanisms to steer members to lower cost options," said Eric Miller , a vice president at Segal, which consults with companies on their benefits.

Take a close look at your plan options. Workers who are reviewing their plan options right now shouldn't be shocked to see higher deductibles and co-pays, said Miller. Some employers are lowering their costs by restricting their employees' choices of doctors or hospitals by adding various tiers to choose from.