You’ve seen prices go up on materials, fuel, and labor. Now it’s health care that’s tightening the screws. If you offer health benefits to your team, you could be looking at the steepest cost increases in over a decade.

Health care costs rose 4.2% last month, according to the Bureau of Labor Statistics. That’s higher than the overall inflation rate of 2.9%. Doctor visits jumped 3.5%, and hospital or outpatient care climbed 5.3%.

2026 Could Bring Bigger Hikes

Experts say this trend is just getting started. Consulting firms are projecting sharp cost increases for employer-sponsored health plans.

Aon reports that U.S. employers should expect a 9.5% increase in health care costs in 2026. That would bring the average cost per employee to more than $17,000 per year. The increase is being driven by higher prescription drug prices and more frequent use of health services.

“The overlooked reality is that employers continue to act as a stabilizing force,” said Farheen Dam, head of Health Solutions for North America at Aon. “They absorb the bulk of the increase while making smart, targeted adjustments that protect employees and preserve plan value.”

Mercer is seeing similar numbers. They say employers are facing their biggest health benefit cost hike in 15 years. Along with higher demand for care, rising wages in the medical field are pushing costs even higher.

For contractors, these rising costs land on top of the already high medical risks that come with the job. According to Travelers’ Injury Impact Report, construction claims are nearly twice as expensive as those in other industries. From slips and overexertion to shocks, amputations, and head trauma, the safety risks are real and so are the medical costs that follow.

ACA Plans Aren’t Spared Either

Even outside the jobsite, health care is getting more expensive. Marketplace plans under the Affordable Care Act are expected to rise 18% next year. That’s the biggest rate request since 2018, according to KFF.

Insurers are pointing to high-cost drugs, labor shortages, and general inflation as key reasons. They’re also concerned about government subsidies set to expire. Without those, over 20 million enrollees could see out-of-pocket premiums rise by 75% on average.

What You Should Watch For

With material prices, labor costs, and insurance premiums already climbing, this news adds even more pressure. But knowing what’s coming gives you a chance to make smart adjustments now, rather than scrambling under pressure later. You may need to reassess how much of these health care increases you can take on before passing some costs to your team.

Some contractors might be forced to scale back benefits or shop around for more cost-effective options. Others may need to look at changing how they structure their plans altogether.

A Tough Year Ahead

It’s still unclear how workers will respond. If coverage becomes too expensive, some may delay care. Others might walk away from health plans entirely. Either way, medical inflation is outpacing the rest of the economy, and you need to be prepared.