Employer-Provided Family Health Insurance Costs Reach $28,303 in Annual Survey
The average cost of an employer-sponsored family health insurance plan reached $28,303 this year, marking a 5% increase from the previous year according to an annual survey released October 22 by the health policy nonprofit KFF. Nearly 157 million Americans under the age of 65 rely on job-based health coverage as the backbone of the nation’s healthcare financing system, outpacing the fewer than 20 million Americans enrolled in Affordable Care Act marketplace plans as of February 2026, USA TODAY reported.
While companies cover the majority of the total premium, workers are absorbing steeper bills. Employees contribute an average of $7,471 toward their family coverage this year, representing a 9% jump from 2025. This increase outpaces average wage growth, which rose 3.7% over the same period, according to KFF findings cited by USA TODAY.
Smaller Firms and Rising Worker Contributions
The financial burden varies significantly depending on company size. Workers at smaller firms face notably higher costs, contributing $9,687 on average for family coverage, which is $2,847 more than the average paid by workers at large companies with 200 or more employees, USA TODAY reported.
More than 40% of employers increased the share of premiums paid by workers. Matthew Rae, an associate director at KFF who co-authored the report, noted that these shifts signal broader cost pressures. “There are real affordability challenges for the millions of Americans who get coverage this way,” Rae said. “And what they are feeling when they are trying to afford their employer-sponsored health insurance doesn’t always match the political moment.”
Weight-Loss Drug Spending and Plan Adjustments
Employers cite popular diabetes and weight-loss drugs known as GLP-1s as a major driver of prescription drug spending pressures heading into next year. Many firms are scaling back or adding restrictions. KFF data shows that only 33% of employers with 5,000 or more workers covered GLP-1s for obesity in 2026, down from 43% the prior year. Most companies now require employees to see a clinician or establish a lifestyle plan before obtaining coverage.
James Gelfand, president and CEO of the ERISA Industry Committee, which represents large employers that pay medical claims directly, stated that companies initially experimented with covering the drugs and are now pulling back as expenses grow faster than the broader economy. “The health care industry is gobbling more of every dollar of take home pay,” Gelfand told USA TODAY.
Alternative Benefit Strategies and Future Projections
To keep plans sustainable, employers are expanding virtual care options and exploring alternative prescription services, including generic drug vendors like GoodRx, SingleCare, and Mark Cuban Cost Plus. More than a third of large firms surveyed added new virtual providers over the last two years, while 20% introduced new in-person care facilities or providers, particularly targeting substance use conditions and mental health services.
As open enrollment approaches for 2027, private-sector benefits consultants project that employer health benefit cost increases could approach double-digit rates, according to Rae. Interim HealthCare human resources director Cory Springhorn noted that his branch experienced a 4% increase in mental health and hospital service costs this year, splitting the difference between the employer and workers. “We are bracing ourselves for the worst because I know employers are getting renewals at 10%, 15%, 20% this year,” Springhorn said.
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