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Many Americans going through open enrollment for health insurance plans are doing a double-take at the rising costs for 2026. 

Rate hikes for public insurance programs like Medicare and MNsure are hefty, but so are increases for employer group plans. Consulting firm Mercer surveyed employers and is 

predicting the largest increase in costs in 15 years

To hear how this is playing out in Minnesota, Cathy Wurzer talked to 

, a Minneapolis-based executive vice president at the benefits consultant firm Holmes Murphy.  

The following transcript has been lightly edited for clarity and length. Listen to the conversation by clicking the player button above. 

According to Mercer, the average cost for health insurance per employee nationwide is rising nearly 7 percent. Are you seeing that in Minnesota? 

Yeah, absolutely. Some of this is dependent upon who you work for, right? If you're a smaller employer right now, in the Minnesota market — and in most markets across the country — you're probably looking at more of an increase in the 10-20 percent range. 

The Mercer survey data is going to skew a little bit more towards the larger employer space, which is looking at anywhere between a 7-9 percent increase right now. So it's really tough sledding across the board, regardless of whether you're with a large employer, a small employer or if you are purchasing insurance on your own through the individual marketplace. 

A lot of it is just a byproduct of the fact that health insurance and health care costs are going up significantly. And I'd also point to pharmacy care as well. 

Typically, within the health care benefit space, you do see a little bit of a lag factor, from an inflationary standpoint. So some of what we're seeing right now is just a byproduct of the high inflationary environment that we have had over the past couple of years. And that's really due to the fact that the insurance companies are typically negotiating multi-year agreements with the provider system. So as the provider systems have seen their labor and supply costs go up, et cetera, they've come back to the table with the insurance companies and looked for higher reimbursement rates. 

We also have an aging demographic, and a big driver right now of increased costs is not only the pharmacy spend, but also high-cost claimants. We're seeing an increased prevalence of cancer, and the costs are escalating within that population, just in general. Mental health needs have gone up significantly over the past couple of years as well. So those are some of the big things that are driving increased costs right now. And really, this is just the insurance companies passing along those increased costs to employers.

Minnesota health insurance premiums will rise sharply in 2026

They're looking at multiple different levers to rein in costs. As it pertains to high deductibles, we've already pushed the envelope as far as we can there. So a lot of employers, I would say, are really focusing on high-value care: focusing on preventive care, getting your annual physical screenings, those types of things. Getting people to engage with primary care, either from a brick-and-mortar perspective or virtually. 

Some alternative plan designs have been rolled out over the last several years that show some promise, and those are all geared at providing more affordable options for both employers and employees if they're willing to make decisions to go to higher-quality, more efficient providers. 

What do you want folks to know as they're navigating this open enrollment period? 

A lot of times it's a check-the-box activity. I would encourage you to really sit down and understand your benefits, ask questions — because the more educated you are, the better decisions you're going to make on the front end, and the better decisions you're going to make moving forward in terms of really engaging with your program. 

Questions about health insurance shopping

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Employer-based health insurance costs are expected to rise sharply in 2026. To learn how this is playing out in Minnesota, Cathy Wurzer talked to Brooks Deibele, a Minneapolis-based executive vice president at the benefits consultant firm Holmes Murphy.

Employer-based health insurance increases (Brooks Deibele)

A wall of prescription bottles at a pharmacy.

Got sticker shock? Here's how much employer-based health insurance costs have risen in Minnesota

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