Is Your Healthcare Spend Normal? A 2026 Benchmarking Guide for Employers

$26,993

Average family health premium in 2025

That’s what the average employer paid for one employee’s family health coverage in 2025—crossing the $27,000 threshold for the first time. And 2026 is projected to be worse: Aon forecasts a 9.5% increase, the highest in over a decade.

If you’re an HR or Finance leader finalizing budgets right now, you’re probably wondering: Is our spend normal? Are we overpaying—or are we just caught in the same storm as everyone else?

Healthcare is typically your second-largest expense after payroll. Yet most employers have surprisingly little visibility into whether their costs are competitive. The system is designed that way. Opacity is profitable.

For a 200-person company, the difference between “normal” and “overpaying” can be $400,000+ per year—enough to fund four new hires or a 2% raise across the board.

This guide gives you the benchmarks, context, and questions you need heading into 2026.

Key Takeaways

• 2025 benchmarks: $9,325 single / $26,993 family premium

• 2026 projections: 6.5–9.5% increase—highest in 15 years

• Normal PEPM range: $1,200–$1,400 per employee per month

• Small employers pay more: ~$400/year higher per employee than large firms

• 59% of employers will make cost-cutting changes to 2026 plans

What 2025 Actually Cost: Your Baseline

Before you can plan for 2026, you need to know where you stand against 2025 benchmarks.

Average Annual Premiums (2025)

By Plan Type

If you’re on a PPO and your costs feel high, that’s partly why—PPO family premiums run $1,300 higher than average.

What’s Coming in 2026: Brace Yourself

Two major consultancies have issued their 2026 projections. Neither is encouraging:

This will be the fourth consecutive year of elevated cost growth—breaking a decade of modest ~3% annual increases.

What This Means in Dollars

For a 200-person company, that’s $200,000–$300,000 more than you paid this year.

Your 60-Second Benchmark Check

Calculate Your PEPM

Grab your most recent benefits invoice and do this math:

Total annual healthcare spend ÷ covered employees ÷ 12 = Your PEPM

PEPM (Per Employee Per Month) is the metric that matters for apples-to-apples comparison.

Compare your result

For 2026 planning, assume your PEPM will increase 7–10%. If you’re already above $1,400, that puts you over $1,500/employee/month next year.

The Size Penalty: Small Businesses Pay More

If you run a company under 200 employees, the deck is stacked against you.

Small employers face higher administrative costs, less negotiating leverage, and more volatile claims experience. Mercer reports that smaller employers (50–499 employees) saw costs rise ~9% in 2025 before taking any action to reduce them.

Why Costs Keep Climbing

Both price and utilization are rising simultaneously—a difficult combination. Four forces are driving the increase:

1) The GLP-1 Tsunami

Ozempic. Wegovy. Mounjaro. These drugs are transforming weight loss and diabetes treatment—and reshaping benefits budgets.

• 43% of large employers now cover GLP-1s for weight loss (up from 28% in 2024)

• Annual cost per patient: $12,000–$16,000+

• GLP-1s were cited by 59% of employers as a top drug cost driver

  The dilemma: not covering them may cost more long-term. Patients on GLP-1s show 40% fewer cardiac events by year two.

2) Specialty Drug Explosion

• Specialty drugs: 2% of prescriptions, 50% of pharmacy spend

• Pharmacy now represents 24–27% of total healthcare costs

• Cancer treatments and gene therapies driving growth

3) Provider Consolidation

Larger health systems have more pricing power. Fewer competitors = higher negotiated rates.

4) Workforce Shortages + Wage Pressure

Healthcare labor costs continue rising, passed directly to employers.

What Smart Employers Are Doing

According to Mercer, 59% of employers will make cost-cutting changes to their plans in 2026—up from 48% in 2025 and 44% in 2024.

The risk: Simply shifting costs to employees may hurt retention. The opportunity is finding actual waste and overpayment.

Industry Benchmarks: How Does Your Sector Compare?

If your increase exceeded your industry average, investigate why.

Five Questions to Ask Before Your 2026 Renewal

1) What’s your PEPM vs. industry benchmark?

If you’re above $1,400 PEPM, you’re paying more than average. Understand why before accepting a renewal.

2) What’s driving your cost increase—price or utilization?

Ask your broker to break it down. High utilization may indicate health issues worth addressing. High prices may indicate poor network contracts.

3) When did you last audit your claims?

Self-funded employers especially should audit for billing errors, duplicate claims, and overpayments. Studies suggest 5–10% of claims contain errors.

4) Are you overpaying for common procedures?

Commercial insurance often pays 2–4x Medicare rates for identical procedures. Knowing this gap gives you negotiating leverage.

5) What’s your GLP-1 strategy?

If you cover them: do you have utilization management? If you don’t: have you modeled the cost of adding coverage vs. the retention risk of not offering it?

2026 Readiness Checklist

Benchmarking

• Calculated current PEPM

• Compared to industry averages

• Understand year-over-year trend

Cost Drivers

• Know your pharmacy vs. medical split

• Have a GLP-1 coverage strategy

• Identified high-cost claimant patterns

Renewal Preparation

• Requested detailed renewal breakdown from broker

• Reviewed alternative plan designs

• Considered claims audit (if self-funded)

• Modeled employee cost-sharing scenarios

Budget Alignment

• Built 7–10% healthcare increase into 2026 budget

• Communicated expectations to leadership

• Prepared contingency if increase exceeds projection

The Bottom Line

The average employer will spend $16,000–$17,000+ per employee on healthcare in 2026—roughly $1,350–$1,420 per employee per month.

If you’re significantly above that, you’re likely overpaying. If you’re below it, you may have a lean plan (good) or coverage gaps worth examining (less good).

The key is knowing. Most employers fly blind because the system profits from confusion. Getting clarity on your benchmarks is the first step toward control.

Not Sure If Your Claims Are Accurate?

Studies show 5–10% of claims contain errors. We audit your claims data, benchmark against Medicare rates, and identify potential savings—so you know exactly where you stand.

Try Our Analysis Tool →

Sources

1. KFF 2025 Employer Health Benefits Survey

2. Mercer: Employers Prepare for Highest Cost Increase in 15 Years

3. Aon: U.S. Employer Health Care Costs Expected to Rise 9.5% in 2026

4. Health Affairs: Health Benefits in 2025

5. Mercer National Survey of Employer-Sponsored Health Plans

6. KFF: Perspectives on GLP-1 Costs for Employers

MedicalBills.com Team — We help employers and patients navigate the complexity of healthcare costs with clarity and confidence.