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

The headline numbers

Employer health coverage got more expensive again in 2026, and workers are paying a bigger share of the increase. KFF's annual Employer Health Benefits Survey puts the average annual premium for employer-sponsored family coverage at $28,303, up 5% from 2025. Single coverage now averages $9,804, also up 5%.1

The sharper change is in what employees pay directly. Workers' average contribution toward a family plan rose 9% to $7,471, an increase of $621 in one year.27 Employers still cover most of the bill, about $20,833 of the average family premium.7 But a 9% rise in employee payments lands harder when wages grew only 3.7% and general inflation was 2.7% over the same period.15

KFF surveyed 1,937 public and private employers with at least 10 workers.2 The responses were collected between January and July 2026, so the survey describes this year's plans, not the 2027 plans workers are choosing now.6 That timing matters, because forecasts for next year are considerably worse.

Two ways to read the same survey

The coverage agrees on the numbers but splits on what they mean. One reading is that things are under control. Matthew Rae, a KFF researcher and one of the study's authors, said a 5% premium increase undercuts the idea that "the sky is falling" on employer insurance, since actuaries and consultants had feared double-digit hikes.2 The survey itself says premiums grew at a "relatively modest pace" despite early forecasts of higher costs.1 It also notes that over five years, family premiums rose 28%, roughly in step with inflation (24.4%) and wages (26.9%).1

The other reading focuses on workers. STAT led with the 9% jump in employee contributions, which beat the 6% and 7% increases of recent years, and suggested employers may be running out of ways to absorb rising costs.4 KFF Health News described costs rising "with little relief in sight."8 KFF president Drew Altman tied the contribution increase to voters' worries about health costs.6

Both readings hold up, but the second fits the trend better. Total premium growth was moderate this year. Still, employers absorbed less of it, so workers' costs grew almost twice as fast as the overall premium. Among firms with 200 or more workers, 44% raised the share of premiums employees pay, and 21% raised deductibles or other cost sharing.68 Across all firms, the average worker share barely moved, at 27% of family premiums and 18% of single premiums.8 That gap suggests the cost-shifting was concentrated among particular employers rather than spread evenly.

The longer view is less reassuring than the five-year one. Over ten years, family premiums rose 55% while inflation rose 37.9%.1 Worker contributions rose 42% for family coverage and 45% for single coverage over the same decade.1

Small firms carry the heaviest load

The clearest finding in this year's data is the gap between small and large employers. Total premiums are similar regardless of company size. However, workers at firms with 10 to 199 employees pay 37% of the family premium on average, compared with 25% at larger firms.1 In dollars, that means $9,687 a year for small-firm workers versus $6,840 at large companies, a difference of $2,847.1013

The top of the range is steep. Nearly a third (31%) of covered workers at small firms are in plans that require $12,000 or more a year toward family coverage.1 About 32% are in plans where the worker pays more than half the family premium, compared with 6% at larger firms.1 Deductibles follow the same pattern: the average single deductible is $2,624 at small firms and $1,772 at large ones.10

Individual business owners describe what this looks like in practice. One Denver restaurant owner said his premium spending is heading from about $150,000 in 2025 to $200,000 in 2026, about 2.7% of revenue in an industry where margins are often 2% to 3%.13 He said only about 40% of his employees now buy the coverage he offers.13 When workers decline coverage that is offered to them, that's a sign affordability problems may be pushing people out of insurance altogether.

Deductibles held steady this year

Deductibles were one exception. The average single deductible was $1,955, up only slightly from $1,886 in 2025.2 Rae noted that deductibles stayed largely flat even as contributions climbed.2 Over the past decade, though, deductibles have risen 34%.13

That pause is unlikely to last. Marsh found that 59% of employers plan cost-cutting benefit changes for 2027, with higher deductibles among the options.11 Higher deductibles keep monthly premiums down but leave people who actually use care with bigger bills.11 In other words, in 2026 employers shifted costs mainly through paychecks, and in 2027 more of the shift may show up at the doctor's office.

2027 looks worse

Consulting firms agree that next year will be expensive. Marsh projects employer health benefit costs per worker will rise 8.2% in 2027, even after cost-cutting measures. That would be the largest increase since 2003.11 WTW projects 11.1%, which it calls the biggest jump in more than 20 years.11 Aon expects 9.5%, the fourth straight year of what it calls elevated cost growth.1120 The Business Group on Health projected a median increase of 9.2%.8 Separately, it put its forecast at 9%, the highest the group has ever recorded.13

Georgetown's Center on Health Insurance Reforms summarized the range as 9% to 11% before employers change their plans, the steepest in about two decades. It added that most large employers plan to pass some of the increase to workers.12 Aon estimates workers' total health costs, including premiums and out-of-pocket spending, already rose 7.9% in 2026, the fastest pace in a decade. Aon expects a similar increase in 2027.11 An Aon analytics executive said many employers have used up their usual cost-control tools and that "the affordability crisis is real."17

Some local brokers report even bigger increases. A Peoria benefits consultant said some employer groups he works with have faced increases of 15% to 25% this year and expects 9% to 12% to continue into 2027.19 That doesn't change the national averages, but it shows how much individual outcomes can vary.

What is driving the increases

The coverage points to several overlapping causes. GLP-1 weight-loss drugs are the most visible new one: Marsh's chief actuary estimates rising GLP-1 use accounts for about 1 percentage point of employer cost growth in 2027.11 Employers are responding in mixed ways. Among large firms, 18% cover GLP-1s for weight loss, 29% of those report a significant effect on drug spending, and 12% stopped covering the drugs in the past year.5

Other pressures are structural. When large hospital systems buy up smaller practices, they gain leverage to negotiate higher payments from insurers. Healthcare labor shortages push up wages, and general inflation raises insurers' costs, which they recover through premiums.1115 Others point to expensive cancer treatments, specialty drugs and large claims.1920 Marsh's survey also found that lower government spending on public health programs is raising costs for private plans.13

Georgetown researchers argue that employers and insurers have failed to hold down prices in negotiations with dominant hospital systems. They say Congress could step in with Medicare-referenced hospital price caps, lower out-of-pocket limits and $0 coverage for primary care before the deductible.12 Some employers haven't waited: one company quoted by KFF Health News kept its health costs flat this year by offering free primary care through on-site clinics and direct contracts with doctors.14

Analysis: the slowdown didn't help workers

The industry may point to the 5% premium figure as evidence of stability. A closer look shows employers holding total cost growth down partly by passing more of it to employees, especially at small firms. This happened in a year when consultants describe the underlying cost pressure as the strongest in two decades. With 2027 forecasts clustered around 8% to 11% and most large employers planning to shift more costs to workers, this year's 9% rise in worker contributions looks more like the start of a trend than a one-time jump.1112 Open enrollment notices arriving now will show how much of that pressure workers absorb next year.