The main reason your company's healthcare costs are skyrocketing

"Organizational leaders are witnessing a steep and unprecedented rise in employee healthcare costs that is eroding bottom-line profitability. According to data from the Business Group on Health, these costs are projected to rise by 9% this year, representing a 62% increase since 2017. To put it in perspective, this represents an incremental hit of nearly $1 million to the bottom line for a midsize organization of 500 people. What CFOs are now confronting is a tipping point where the average total cost to insure an employee is nearing $20,000 annually."

"Notably, it is specifically mental health claims that are driving the spike. PwC's 2026 Medical Trend report shows that inpatient mental health claims have jumped a staggering 80% in the last 24 months. For years, the corporate world has treated employee mental health as an imported problem-personal struggles that people bring with them into the workplace. But the evidence is now irrefutable that how employers manage their employees is having the greater impact and is often the leading driver of the strain."

"To be very clear, the way we work today has become a primary manufacturer of incremental stress, burnout, and mental health decline. The Smoking Gun: Work is the Cause Until now, the standard corporate response to employee mental health challenges has been to treat the symptoms rather than address the root causes. This means they've offered workers resilience training, yoga and exercise classes, and sleep and meditation apps-all band-aids on a structural wound."

Employee healthcare costs have surged, with a projected 9% increase this year and a 62% rise since 2017, adding roughly $1 million annually for a 500-person organization. Average total cost to insure an employee nears $20,000, with inpatient mental health claims up about 80% in 24 months. Workplace factors, rather than personal issues, are the dominant drivers of stress, burnout, and mental health decline. Common corporate responses focus on symptom relief—resilience training, yoga, and apps—rather than addressing structural work practices. MHA data indicates 84% of workers identified workplace factors harming their mental health.

Read at Fast Company