Employer Health Premiums Hit $28,303 as Worker Share Jumps 9%

The 2026 numbers

A family health plan through an American employer now costs an average of $28,303 a year. That is the main finding of KFF's 2026 Employer Health Benefits Survey, released October 22, which puts the increase over 2025 at 5%, or $1,310.12 Single coverage rose by the same 5%, to $9,804.1 The survey is KFF's 28th annual edition. It is based on interviews with 1,937 public and private employers that have at least 10 workers.316

The 5% headline number is not where most of the coverage landed. The bigger story is how much more workers paid out of their own paychecks. Employees with family coverage contributed an average of $7,471 this year, up 9%, or $621, from $6,850 in 2025.211 Employers paid the remaining $20,833 of the average family premium.68 Worker contributions for single coverage grew even faster, from $1,440 to $1,672.11 That works out to roughly a 16% jump, a number some regional outlets put at the top of their stories.14

For comparison, wages grew 3.7% over the same period and general inflation was 2.7%. KFF notes that inflation has been running higher in recent months.2 Premiums grew faster than paychecks this year, and the money workers actually paid grew more than twice as fast as their wages.

How workers' costs rose faster than the premium

Workers' costs rose 9% while the premium rose 5% because employers changed how they split the bill. Among large employers (200 or more workers), 44% said they raised the share of the premium workers pay in response to projected cost increases. That was the most common step large firms took.411 The likelihood of doing this grew with company size, from 16% of firms with 10 to 199 workers to 66% of firms with 5,000 or more.11

On average, though, the split barely changed. Workers still pay about 27% of family premiums and 18% of single premiums, close to last year's levels.14 These figures fit together. Cost-shifting was concentrated among big employers, and a 9% rise in dollars can happen without much change in the percentage because the premium base also grew.

KFF's Matthew Rae, one of the study's authors, told Fierce Healthcare that the increase in contributions comes after several years in which employers tried to avoid shifting costs onto workers. He also noted that deductibles stayed mostly flat.16 The average single-coverage deductible was $1,955, up modestly from $1,886 in 2025.16 Rae also linked cost-shifting to the job market. Health insurance is part of total compensation, so when hiring cools, employers have more room to ask employees to pay more.17 Read this way, the 2026 numbers say as much about employers' leverage over workers as about medical inflation.

Small-business workers carry the heaviest load

Every outlet covering the survey highlighted the gap between workers at small and large firms. At companies with 10 to 199 employees, workers paid an average of $9,687 toward family coverage. At larger firms the figure was $6,840, a difference of $2,847.1113 Small-firm workers pay 37% of the family premium on average, compared with 25% at large firms.11 About 32% of covered workers at smaller firms are in plans that require them to pay more than half the family premium, compared with 6% at larger firms.11

Small firms also have higher deductibles. The average single deductible is $2,624 at small firms and $1,772 at large ones.7 The difference cuts both ways. Small employers are more likely than large ones to cover the full premium for single workers, at 29% versus 5%.11 But workers at small firms who need to cover a spouse and children face the steepest costs anywhere in the system. STAT reported that small businesses are increasingly pulling back from offering coverage at all, and that experts describe employers as nearing a "breaking point."

Hospitals and GLP-1 drugs

The coverage broadly agrees on what is pushing costs up. Higher prices for hospital care and growing use of expensive drugs such as GLP-1s for weight loss are both cited as major drivers of spending by insurers and employers.13 Rae said steadily rising inpatient hospital costs are the single biggest force behind premiums. He added that employers are spending more than they expected on GLP-1s and are looking at specialty drug management for next year.17

The survey's GLP-1 findings suggest employers are holding back rather than expanding coverage. Only 18% of large firms cover these drugs mainly for weight loss, slightly fewer than the 19% that did in 2025.14 Coverage rises with company size, from 16% of firms with 200 to 999 workers to 33% of firms with 5,000 or more.11 Among employers that cover the drugs, 29% said they had a significant effect on prescription spending, and another 27% described a moderate effect.16 About 40% require patients to see a dietitian, case manager, or therapist, or to join a lifestyle program, before the drug is covered.14 Few employers that don't cover GLP-1s plan to start: 1% said they were very likely to add coverage and 13% said somewhat likely.16

One company's numbers show the scale. Bank of America CEO Brian Moynihan has said the bank spends about $250 million or more a year on these drugs for employees, around 13% of its more than $2 billion in annual employee health spending.15

The coverage does not fully agree on one point. Some outlets described the 29% figure as applying to all companies surveyed.515 Others limited it to large firms that actually cover GLP-1s for weight loss.1216 The narrower reading fits KFF's method better and matters for interpretation. The cost pressure falls mostly on the minority of employers that chose to cover the drugs, not on employers as a whole.

Bad, but not a disaster

The coverage divides most sharply on how alarming the numbers are. KFF's own framing is more measured than many headlines. The survey's discussion section says premiums rose at a "relatively modest pace" even though early projections pointed to bigger increases in 2026. Over five years, family premiums rose 28%, roughly in line with wages (26.9%) and inflation (24.4%).1 Rae told Fierce Healthcare that the result "cuts against a thought that, like, the sky is falling on employer-sponsored health insurance," while noting that keeping increases to 5% takes considerable effort from HR departments.16

Some coverage went further than the data. One explainer said the five-year premium increase "substantially outpaced" wage growth.3 KFF's figures show a gap of only about one percentage point over that period.1 A STAT headline said health insurance premiums "jumped 9%," which mixes up the rise in worker contributions with the rise in the total premium. The more alarming long-term figure is the ten-year one. Family premiums rose 55% over the decade, well ahead of 37.9% inflation but close to wage growth of 50.1%.1

The most defensible reading is that the system is under strain but has not broken. The rise in total premiums was manageable. The real change in 2026 is that a larger share of that increase ended up in workers' paychecks, particularly at small firms.

The politics

KFF's president and CEO, Drew Altman, tied the findings directly to the political climate. He said the 9% rise in what workers pay should be added to concerns about cuts to the Affordable Care Act and Medicaid as reasons voters are worried about health costs.13 He has also said health care costs now rank alongside gas prices as a top cost-of-living concern.5 Democrats responded quickly. Sen. Elizabeth Warren blamed "healthcare conglomerates" and Republican funding cuts.15

The partisan argument may not match what is actually driving costs, which is mainly hospital prices and drug spending. Still, employer coverage is the main source of insurance for Americans under 65, covering roughly 157 million to 160 million people depending on the count.313 At that scale, a 9% increase in what families pay will register politically.

Looking ahead to 2027

The outlook for next year is worse. KFF says forecasts for 2027 again point to premium increases approaching double digits. It cautions that how projected spending turns into actual premiums is not yet clear.11 Outlets aimed at consumers are already warning workers that consultants expect bigger increases in 2027 and urging careful plan comparison during open enrollment.7

If those forecasts hold, the pattern from 2026 is likely to repeat with higher numbers. Large employers have already shown they will shift costs to workers when projections rise, and small employers have little room left before dropping coverage. In this analysis, the 9% jump in worker contributions is more likely to be the start of a trend than a one-time event.