National Survey of Employer-Sponsored Health Plans 2017

Employers Make Strides Toward Better Healthcare

Mercer’s annual US survey highlights trends in employee health benefit costs, design, and strategies.


4 Survey Takeaways: Employer Efforts Focus on Cost and Care Improvements.

Reducing healthcare inefficiency and improving care quality requires creative strategies and ingenuity.

For over 30 years, employers of all sizes have used Mercer’s National Survey of Employer-Sponsored Health Plans to create data-driven health and benefits strategies to better manage cost, promote quality care, and improve member experience.

  • Employers make progress in tackling benefit cost growth: Employers’ hard work is helping to stabilize health benefit cost growth. The average total health benefit cost per employee rose a modest 2.6% in 2017. Behind the average, some reported decreased cost while others saw increases of more than 10%. But the 2017 trajectory is encouraging: Over the past 5 years, cost has risen by an average of 3.3% annually, compared to 6.2% during the prior 5-year period.
  • Empowered consumers make smarter health decisions: Employers are empowering people with tools and resources to care for their health and make better healthcare decisions. “Transparency tools” (now offered by 82% of employers with 500+ employees) help consumers compare healthcare prices and quality, while telemedicine provides a low-cost alternative to an office visit (offered by 71%).
  • Focus on employee choice informs high-deductible health plan strategies: In 2017, 30% of all covered employees enrolled in a high-deductible consumer-directed health plan (CDHP). That’s nearly flat from 2016. One reason for slowing enrollment growth is that most employers remain committed to providing choice: just 10% of employers with 500+ employees offer a CDHP as the only medical plan at their largest worksite.
  • Businesses actively take on soaring drug prices: Rising drug prices, especially for specialty drugs, remain one of the biggest cost drivers—and with hundreds of specialty drugs in development, it will only get worse. Businesses are turning to new strategies and healthcare innovations to address this and other serious challenges posed by the US healthcare system.
of large employers vary the premium contribution based on employees’ tobacco use.
of large employers have conducted an analysis of employees’ mental health and substance abuse issues and 14% are considering doing so in the next two years.
of large employers that provide incentives for non-tobacco use, rely on the honor system (including affidavit) or peer-policing to verify employees’ tobacco use status. Only 10% use online testing.
of employers with 500+ employees now steer members to a specialty pharmacy to help combat soaring drug costs.
of employers with 5,000 or more employees now offer a second medical opinion program that is usually free of cost.

Did you know?
Telemedicine is growing in response to consumer calls for more choice: 71% of employers with 500 or more employees now offer these services, up from 59% last year.
Health advocacy services, which provide employees with personal guidance in how to find the right healthcare provider, compare costs, and resolve claims problems, are offered by about half of large employers.
Transparency tools, online resources that let members compare health provider prices and quality ratings, are provided by 82% of employers with 500+ employees.
Coverage costs about 20% less, on average, in an HSA-eligible CDHP, than in a traditional PPO plan or HMO, among large employers.
ACOs are promoting quality: Delivery systems promoting alternative provider payment methods—like accountable care organizations (ACOs), patient-centered medical homes (PCMHs), and centers of excellence (COEs)—are improving quality, customer satisfaction, and incentivizing workers to select proven care providers.

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Attend a live workshop to hear insights from Mercer’s Health Survey and learn about employer actions to address escalating drug prices, employee engagement, value-based care, health data, and more. You'll walk away with insights into trending issues in your market that will help you create a future-ready benefits strategy for a thriving workforce. Select a State below to see seminar events happening in your area.

Employer Strategies Tame Healthcare Cost Growth

Employers are using a range of new tools and creative strategies to engage employees, improve healthcare experiences, and address growing costs—and it’s working. Employer health benefit costs grew just 2.6% in 2017, the sixth straight year of increases at or below 4%. A noteworthy add-on: This year’s low cost growth came even as fewer employees moved into high-deductible plans.

Source: Mercer’s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1993-2017; Bureau of Labor Statistics, Seasonally Adjusted Weekly Earnings from the Current Employment Statistics Survey (April to April) 1993-2017.

Behind the Cost Average, Employer Experience Varied Widely

Percentage of employers reporting % change in total health plan cost per employee from 2016-2017

Cost increased more than 10%
Cost increased 6% - 10%
Cost increased 5% or less
No change in cost or cost decrease



  • November 2, 2017
  • United States, New York

In contrast to the turmoil in the individual health plan market, employer health plan sponsors extended their run of low annual cost increases in 2017.

The Mercer National Survey of Employer-Sponsored Health Plans 2017, the nation’s largest of its kind, reports that average total health benefit cost per employee rose by 2.6% in 2017. That follows a similar increase of 2.4% in 2016 (Figure 1). Cost growth has averaged just 3.3% annually over the past five years, compared to 6.2% over the prior five-year period. Notably, the survey revealed that low-cost growth was achieved without significant new migration of employees into high-deductible plans. 

Despite this moderate growth, health coverage represents an enormous expense. Total health benefits cost averaged $12,229 per employee, or 14% of total payroll, in 2017. Even among smaller employers (those with 10-499 employees), where benefits are typically less generous, health benefit cost averages $11,527 per employee (Figure 2).  High cost affects employees as well as employers:  In 2017, employees are paying, on average, 24% of the total cost of coverage through paycheck deductions (Figure 3). 

“The high cost of healthcare poses major challenges to employers and their employees,” said Sharon Cunninghis, who leads Mercer’s Health business in the US. “We’re helping employers gain ground on some of their biggest cost drivers by such means as addressing chronic conditions with enhanced care management, and targeting double-digit spending growth on specialty drugs with a suite of pharmacy solutions. When you reduce cost by improving quality, that’s a win-win.” 

Read more or Purchase the 2016 Report on iMercer