Health Benefit Costs Among Top Opex Worries, CFOs Say

Why It Matters

Rising health‑benefit costs erode profit margins and force CFOs to reallocate capital, reshaping budgeting priorities across industries. The trend signals a looming pressure point for talent retention and overall cost‑competitiveness.

Key Takeaways

• Health benefit costs rank in top five OPEX concerns for 75% CFOs.
• Average employee health cost exceeded $17,000 in 2025, rising 6.7% in 2026.
• 45% of CFOs prioritize redesigning health plans over raising employee premiums.
• Cost growth outpaces inflation, hitting a 15‑year high.
• CFOs cite health costs as top‑three worry, up from 19% in 2024.

Pulse Analysis

Health‑benefit spending has become a headline‑grabbing line item for finance leaders, largely because cost growth now runs at roughly twice the pace of overall inflation. The surge began in 2023 after a decade of modest 3% annual increases, pushing the average per‑employee expense above $17,000. For CFOs, this translates into tighter operating budgets and heightened scrutiny of every dollar, especially as benefits remain a critical lever for attracting and retaining talent in a competitive labor market.

Mercer’s February 2026 survey of 161 organizations provides a data‑driven snapshot of the escalation. Compared with 2024, the share of CFOs listing health costs among their top three concerns jumped from 19% to one‑third, while three‑quarters now place it in the top five expense categories. The average cost per employee is slated to climb 6.7% in 2026, a 15‑year high, even after accounting for planned employer cost‑saving measures. Before those adjustments, the raw increase exceeded 9%, underscoring the magnitude of the budgeting challenge.

In response, CFOs are gravitating toward structural changes in plan design rather than simply shifting more premium costs onto workers. Forty‑five percent favor stronger emphasis on redesigning health plans—such as higher deductibles—while 38% consider raising employee contributions. These tactics aim to balance cost containment with employee satisfaction, but they also risk affecting broader business operations if not managed carefully. Companies that proactively align benefit strategies with financial goals are better positioned to mitigate margin pressure and sustain workforce morale amid rising health‑care expenses.