Employer Health Premiums Hit $28,303 as Worker Costs Jump 9%

The headline number: $28,303

In 2026, the average cost of employer-sponsored family health coverage reached $28,303 a year. That is 5% more than in 2025, according to KFF's annual Employer Health Benefits Survey.1 Single coverage rose by the same 5%, to $9,804.1 Both increases outpaced wages, which grew 3.7%, and general inflation, which was 2.7%.1 KFF surveyed 1,937 public and private employers with at least 10 workers, and Davis Research conducted the fieldwork from January through July.46

The total premium is not the most important figure in the report. What workers pay is. The average worker contribution toward a family plan rose 9%, or $621, to $7,471.2 Employers paid the rest, about $20,833 on average.6 Worker contributions for single coverage grew even faster, rising $232, or 16%, to $1,672.9 Fierce Healthcare pointed out that this jump follows several years in which employers had tried to avoid pushing more costs onto employees.4

Outlets disagree on how to frame the story. Matthew Rae, one of the KFF authors, told Fierce Healthcare that a 5% rise falls well short of the double-digit increases some actuaries had warned about. In his words, the result "cuts against a thought that, like, the sky is falling on employer-sponsored health insurance."4 The survey itself says premiums grew at a "relatively modest pace" even though early projections pointed higher. It also notes that family premiums rose 28% over five years, roughly in line with wages (26.9%) and inflation (24.4%).1

The longer view is less comforting. Over ten years, family premiums climbed 55% while inflation rose 37.9%.1 Rae's point is fair as far as the totals go. But the 9% rise in what workers pay is the change households will actually notice.

Who is absorbing the increase

The survey suggests employers are not just paying higher bills. They are changing how costs are split. Among large firms with 200 or more workers, 44% raised the share of premiums employees pay.3 Across all firms, 18% did so in anticipation of steeper premiums.6 Overall contribution shares barely moved, at 27% for family coverage and 18% for single coverage.3 That apparent contradiction resolves this way: the share of the bill workers pay was stable, but the bill kept growing.

Deductibles were mostly flat. The average for single coverage was $1,955, compared with $1,886 in 2025.4 Over a longer stretch, deductibles have more than doubled since 2011, when the average was $955.9

Workers at small firms carry the heaviest load. At firms with 10 to 199 workers, the average family contribution is $9,687, compared with $6,840 at larger companies.1 Small-firm workers pay 37% of the family premium on average, against 25% at large firms.6 Nearly a third of covered workers at smaller firms, 32%, must pay more than half of the family premium, compared with 6% at larger employers.1

Lower-wage workforces also pay a larger share. At firms where at least 35% of workers earn $38,000 or less, the average family contribution rate is 31%, versus 27% elsewhere.1 Employers themselves are not happy with the trend. Only 17% said they were "very satisfied" with the overall cost of care for their workers, while 29% said they were dissatisfied.6

What is driving costs

Rae identified steadily rising inpatient hospital costs as the biggest driver of premiums. Employers also said they are paying more than expected for GLP-1 drugs and are looking at specialty-drug management for next year.5 Twenty-nine percent of surveyed companies said covering GLP-1 weight-loss drugs had significantly affected their drug costs.7 KFF Health News reported that other studies, including one from the Business Group on Health, also point to artificial intelligence as a contributor.3

To hold costs down, employers report raising deductibles, switching insurers, adding prior-authorization requirements, and narrowing provider networks.3 Some are steering workers to discount pharmacy options such as GoodRx, SingleCare, and Mark Cuban Cost Plus.5

Why 2027 looks worse

The moderate 2026 increase is unlikely to hold. Forecasts for 2027 premium growth are approaching double digits.6 Marsh projects an 8.2% rise in health benefit costs, the largest since 2003.34 One human resources director in the Twin Cities told KFF Health News that she is bracing for the worst because employers are receiving renewal quotes of 10%, 15%, and 20%.5

The uncertainty matters because the 2027 increases will land on a workforce already paying more. On the evidence available, the 2026 result looks less like a turning point and more like a short pause before larger increases.

Coverage outside the workplace is shrinking

The KFF report came out the same day as the Commonwealth Fund's biennial coverage survey. Together they show Americans losing ground in every type of coverage. The uninsured rate among working-age adults rose from 8.9% in 2024 to 11.2% in 2026, a statistically significant increase.31 Marketplace and individual-market coverage fell from 8.5% to 6.4% of that population.31 The share of working-age adults on Medicaid has dropped from 15.5% in 2022 to 13%.31

Two policies ending explain much of the decline. Enhanced ACA premium tax credits expired at the end of 2025, and pandemic-era Medicaid enrollment protections ended earlier.32 KFF data show Marketplace enrollment fell from 21.8 million to 19.2 million in 2026, and New Mexico, which replaced the lost credits with state subsidies, was the only state without a drop.40 By June, enrollment was down 18% from a year earlier.37

That decline also affects employers. An Urban Institute and Commonwealth Fund projection estimated that about 3.2 million people would move toward employer coverage after the subsidies expired.34 Analysts expect the shift to be heaviest at small and mid-sized employers with many hourly workers. Some of these new enrollees may have put off care while uninsured, which could push claims above what plans priced in.34

Medicaid work requirements begin in January

The largest coverage change has not yet taken effect. Under H.R. 1, the 2025 reconciliation law, most Medicaid expansion enrollees will have to document 80 hours a month of work or approved activities. States also must check their eligibility every six months.31 States have to implement the work requirement by January 1, 2027, though they can request temporary exemptions.34

Reporting puts the affected group at about 20 million people in the states that expanded Medicaid.35 Estimates of the eventual losses vary with the scope of each model. Commonwealth cites net Medicaid enrollment losses of 11.5 million over a decade.31 The Congressional Budget Office projects that the law will add 10 million uninsured people by 2034, 7.5 million of them from the Medicaid changes.36 KFF attributes 5.3 million of those Medicaid-related losses to work requirements.36 When the expired subsidies are included, total estimates rise to about 17 million.37

The timing is likely to put direct pressure on employer plans. Because the requirement starts in the first month of most calendar-year plans, any resulting move into job-based coverage will happen during the 2027 plan year rather than at the next renewal.34

Medicare Advantage: lower average premiums, higher costs elsewhere

Medicare is a different picture, and the figures depend on who is reporting them. CMS projects that the weighted average Medicare Advantage premium will fall 16.5%, from $14.37 to $12.00 a month, in 2027. It also expects drug premiums inside those plans to drop 38%.21 Industry analyst Jared Strock, as reported by CNN, puts the decline at about 7%, to $12.11. He also finds that premiums for plans not designed for chronic or special-needs populations will rise 23%, to $14.80.27

Below the premium figures, costs are rising in other places. Nearly 3.2 million enrollees, about 11%, must find new plans because their insurers dropped them.27 Nearly three-quarters of enrollees will pay more for prescriptions, with the average drug deductible rising 23% to $509.27 Out-of-pocket maximums are up about 10%, and only 15 contracts earned five stars, down from 22.24 Standalone Part D premiums are edging up from $35.09 to $36.00 because a Biden-era stabilization subsidy is ending.26 CNN reported that some insurers are raising those premiums by more than $50 a month.27

The CMS figure is accurate as an average, but it hides a lot. For many beneficiaries, 2027 will mean more disruption and higher costs when they actually use care, even if their monthly premium falls.

Medicare drug price negotiations

The most direct price relief in the system is coming through Medicare drug price negotiation. Negotiated prices for 15 more drugs take effect January 1, 2027. They include semaglutide, sold as Ozempic, Wegovy, and Rybelsus, at $274 for a 30-day supply, compared with a 2024 list price of $959.13 AARP put estimated savings at $8.5 billion to $12 billion a year.11 One academic analysis found the new prices were 15% to 60% below estimated net prices before negotiation, with a median of 38%.19 At the same time, the Part D out-of-pocket cap rises from $2,100 to $2,400.13

The contrast with the employer market stands out. Employers are paying more than expected for GLP-1s and turning to discount pharmacy programs5, while Medicare now uses its buying power to set lower prices for the same drugs.

The takeaway

Read together, these reports describe a system where costs are rising and more of them are falling on individuals. Half of working-age adults said they skipped needed care because of cost, up from 46% in 2022.31 KFF chief executive Drew Altman said the 9% jump in worker contributions adds to voters' worries about ACA and Medicaid cuts.9 Health care costs are now tied with gas prices as a top cost-of-living concern.7 With the midterm elections close, the $28,303 figure matters less for what it shows about 2026 than for what is coming in 2027: larger premium increases, Medicaid work requirements, and more people moving into employer plans.