A new survey from the benefits consulting firm Mercer suggests healthcare costs are no longer viewed primarily as an HR or people issue. As these costs have continued to go up year after year, they are increasingly being treated as a core business risk.
The report, titled The CFO Perspective on Health 2026, published in February of this year. The team surveyed 161 finance leaders overseeing healthcare budgets. The findings paint a picture of executives growing increasingly alarmed by the trajectory of employer healthcare spending. Quietly in the background, we are hearing reports of employers starting to cut benefits, including paid family leave.
A few findings that stood out to us:
A third of CFOs now rank healthcare costs as a top-three operating expense concern, up sharply from 19% in 2024.
Health benefit cost growth will hit a 15-year high this year. In 2023, cost growth averaged about 3% annually. Before making changes, employers this year face a cost increase of 9%.
Only about one in four companies said they were able to absorb recent healthcare cost increases without broader business consequences. Others reported slower wage growth, reduced hiring, lower investment, and cuts to other benefits.
Smaller employers with sub 500 employees are particularly alarmed.
More than half of CFOs said they are not confident that long-term healthcare management strategies requiring investment are actually saving money.
That last point feels particularly notable, given how much we’ve covered so-called “point solution fatigue” at Second Opinion. Employers for years have layered on navigation companies, condition management programs, and digital health vendors, often with the promise of downstream savings. But finance leaders increasingly appear to be asking a harder question: where is the ROI? Companies that have not sufficiently demonstrated ROI will be in a very tough position moving into 2027, particularly as many of these companies were implemented more than a decade ago. So by now, the results (or lack thereof) should be clear.
This situation is unlikely to improve anytime soon, experts say.
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“I’ve been foreshadowing that costs will get worse,” said Ellen Kelsay, President and CEO of Business Group on Health, an organization that works closely with employers to tackle healthcare costs. Kelsay pointed to compression in federal spending on Medicare and exchanges as resulting in a cost shifting to the commercial market, inflationary AI trends, overall decline in population health, GLP-1s, and cell and gene therapies as all being factors for increasing costs.
“Savvy HR/Benefits leaders must embrace this moment of reckoning proactively,” she said.
The survey also highlighted growing concern around: