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.

More than premium increases

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.

What you need to review

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.

“For most workers, it’s really important to have a very broad network of providers and stay with their doctors,” Umland said. “But others will be able to lower costs if willing to have less choice of providers in another plan option.”

Check your 2027 plan’s drug formulary. Employers are making it tougher to fill expensive drug prescriptions, often tacking on difficult approval processes for expensive drugs or treatments, per KFF.

More employers, for instance. are giving GLP-1 coverage the ax. 

A huge share of employers report that GLP-1s are driving an increase in their company’s health care costs, according to a new report from the Business Group on Health (BGH).

The percentage of large employers covering GLP-1s for weight management dropped from 72% in 2025 to 60% in 2026. Another 14% have dropped coverage or plan to eliminate it for 2027. 

Many plans also offer different cost sharing for different brand-name drugs, Rae said. “You could potentially be saving a lot of money by switching to an equivalent drug. Many plans also have incentives on what healthcare providers you see, too.”

Estimate medical expenses. Will you hit your deductible? If you didn’t go to the doctor at all last year, you might find a plan with lower premiums. 

But if you expect to use more care in 2027, you want to get a plan with lower cost-sharing throughout the year. That might mean higher premiums but ultimately a cost savings. 

Open an HSA account. The allure of an HSA is its triple tax advantage. You put money in on a tax-free basis, it builds up tax-free, and comes out tax-free for qualified healthcare expenses. (One drawback: Some states assess state taxes.)

In order to put money into an HSA, you must be enrolled in a high-deductible health plan. In those plans, you pay a lower premium per month, but a higher annual deductible. 

For 2027, the minimum deductible is $1,750 for individual coverage and $3,500 for family coverage. Your contributions roll over year after year and are yours to take along when you retire or change employers.

The 2027 contribution limit for an HSA is $4,500 for individuals and $9,000 for families. Individuals 55 or older who are not enrolled in Medicare can contribute an additional $1,000.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Old to Get Rich.”

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