Health Insurance Costs: Workers' Family Premium Share Jumps 9%

Workers are paying more of the bill

One number in this year's benchmark survey of job-based health coverage stands out. It is not the total cost of a family plan. It is the share that workers pay out of their own paychecks. KFF's 2026 Employer Health Benefits Survey, released October 22, found that covered workers now contribute an average of $7,471 a year toward family coverage. That is $621 more than in 2025, an increase of 9%.13 Total family premiums, counting the employer's share, rose a more modest 5% to $28,303. Single coverage also rose 5%, to $9,804.11

The two figures point in different directions, and that gap is the story. Employers kept the overall cost increase to 5%, and then passed more of it to employees. Among large firms with 200 or more workers, 44% said they raised the share of the premium workers pay to deal with higher projected costs, and 21% raised deductibles or other cost-sharing.13 Wages grew 3.7% over the same period and general inflation was 2.7%. That means the worker's share of family premiums grew more than twice as fast as pay this year.1311

The survey drew on 1,937 randomly selected private and non-federal public employers with at least 10 workers, with fieldwork running from January through July.15 Job-based coverage reaches almost 157 million Americans under retirement age, so even small percentage changes affect a lot of household budgets.20

Two ways to read the same survey

Coverage of the release split clearly on what it means. STAT framed the results as health costs rising faster for people with workplace coverage. It noted that the 9% jump in worker contributions was larger than the 6% and 7% increases KFF recorded in recent years, and its headline raised the possibility of a "breaking point."12 KFF Health News made a similar comparison, putting this year's increase in worker contributions against a 7.6% rise from 2024 to 2025, and described the outlook as offering little relief.16

Fierce Healthcare took a calmer view, mostly through Matthew Rae, the KFF associate director who co-authored the study. Rae said a 5% increase in total premiums is smaller than the double-digit hikes some actuaries and consultants had feared, and that this undercuts the idea that "the sky is falling" on employer coverage.14 KFF's own discussion section takes a similar line. It says premiums rose at a relatively modest pace despite early forecasts of higher costs, and that over five years family premiums (up 28%) have roughly kept pace with inflation (24.4%) and wages (26.9%).11

Both readings are accurate, but they answer different questions. The calmer one is about the health care system as a whole: what a family plan costs, and how that cost compares with the broader economy over several years. The more alarmed one is about what a worker sees on a pay stub this year. For households, the second one is what matters. Over a ten-year window, the family premium has risen 55% against 37.9% inflation, so the long-run gap is real even if the five-year numbers look tame.11

Rae also said a 5% increase takes real work. Human resources teams get there by changing benefits and pushing harder on plans and vendors for better deals.14 Put plainly, employers are using up the tools they have for holding costs down. Rae told KFF Health News that when use or prices rise, employers have only a limited number of options.16 Shifting premium costs to workers is one of the most direct of those options, and the 2026 data suggests more employers are using it.

Small businesses bear the heaviest load

Every outlet that covered the survey highlighted the gap between small and large employers. Workers at firms with 10 to 199 employees pay an average of $9,687 a year toward family coverage, compared with $6,840 at larger firms.11 On average, small-firm workers pay 37% of the family premium, against 25% at large firms.15 Nearly a third of covered workers at small firms, 31%, are in plans that require a family contribution of $12,000 or more.11

The split has another side. Small firms are much more likely to pay the full premium for single coverage: 29% of their covered workers have no premium contribution, compared with just 5% at larger firms.11 But 32% of small-firm workers must pay more than half the family premium, compared with 6% at large employers.11 For a worker at a small business with a spouse and children, family coverage can cost as much as a large monthly bill. Rae told the Los Angeles Times that small firms also face higher deductibles and more volatility in the market.20

Deductibles held steady, but the trend points up

Deductibles barely moved this year. The average for single coverage was $1,955, close to $1,886 in 2025.14 Rae said premium contributions rose while deductibles stayed largely flat, and Fierce described the worker-cost increase as a reversal after several years in which employers tried to limit cost-shifting.14

The longer trend is less reassuring. In 2026, 38% of covered workers had a general annual deductible of at least $2,000 for single coverage, up from 34% the year before. That share has grown 31% in five years and 63% in a decade.15

Employers do not seem comfortable with where things stand. Only 17% of firms offering benefits said they were "very satisfied" with what they pay for their workers' care, and 29% said they were dissatisfied or very dissatisfied.15 By contrast, 95% were satisfied with the quality of providers in their networks.15 Employers are not unhappy with the care their workers get. They are unhappy with the price.

Next year looks worse

The forward-looking signals are what make this year's 5% look like a pause rather than a turning point. The Business Group on Health, which represents self-insured employers, predicted a median premium increase of 9.2% next year, though employers may bring that down through benefit changes.16 Becker's summary of the survey also noted that forecasts for 2027 are close to double digits.15 KFF Health News pointed to one less familiar cost driver: reports that hospital systems and other providers are using artificial intelligence to maximize what they bill insurers and patients.16

If premiums rise close to 9% next year, and employers keep reacting the way 44% of large firms did this year, the worker's share could rise faster again. KFF president Drew Altman tied the findings to politics. He said the jump in worker contributions adds to voters' worries about health costs, alongside the debate over Affordable Care Act and Medicaid cuts.13

Home insurance follows a similar pattern

Health coverage is not the only insurance bill rising faster than paychecks. Homeowners insurance shows a similar pattern: the national numbers are slowing, while sharp local spikes continue.

NerdWallet analyzed more than 840 million rate estimates. It found that premiums for a typical U.S. home rose 24% from early 2023 to early 2026, a median increase of $496, bringing the typical premium to $2,564.1 The annual increase slowed to 4.6% over the most recent year. NerdWallet's review of 2026 rate filings found a median requested change of just 1%, which suggests many insurers have paused increases to compete for customers.1

Other data sets show more strain. Insurance.com's 2026 analysis puts the national average premium at $2,872. Massachusetts rose 42.9% in a single year, from $1,478 to $2,112, and Nebraska had the largest dollar increase at $960.5 Florida remains the most expensive state at an average of $8,471, despite legislative efforts to lower rates.5 The different national averages from the two analyses reflect different methods. Both agree that where you live matters more than the national figure.

Individual insurers are still raising rates. State Farm is increasing Illinois homeowners rates by nearly 8%, on top of a 27.2% hike the year before. The company cited weather-related catastrophe losses and said it has paid $1.22 in claims and expenses for every $1 in premiums collected in the state over three years.6 Illinois responded with a law, effective July 2027, that gives regulators more power to review rates and requires 60 days' notice before renewal increases above 10%.7 In California, the state's insurer of last resort, the FAIR Plan, announced an average increase of 29.1% effective this month.10

What it adds up to

The two markets have different causes. Health premiums are driven by medical prices and use. Home premiums are driven by weather losses, rebuilding costs and reinsurance.3 What they share is who ends up paying. In employer health plans, companies are protecting their own costs by shifting more of the premium to workers. In home insurance, a slowing national average hides double-digit increases in particular states and at particular companies. In a survey by The Zebra, 47% of homeowners said they would struggle to pay their mortgage if premiums rose.2

The 5% headline figure in the KFF survey is real, and so is the argument that premiums have tracked wages over five years. But the clearer signal for 2026 is the 9% increase in what workers pay, combined with forecasts of near-double-digit premium increases ahead. Employers have absorbed most of the rising cost of care so far. This year's data suggests that is starting to change.