Updated October 22, 2026, 8:15 a.m. ET
Imagine if your employer bought your family a new Honda HR-V or Subaru Crosstrek every year on top of your regular salary. That’s about the price of a job-based family health insurance plan.
The average family health insurance plan offered by an employer cost $28,303 this year, a 5 percent increase from last year, according to the annual Employer Health Benefits Survey released Oct. 22 by KFF, a health policy nonprofit.
While companies foot most of the bill, some seek to cover those costs by requiring workers to pay a larger share of premiums and raising deductibles.
Health insurance costs exceed workers’ wages
Employees will pay an average of $7,471 this year for a family health plan at work, a 9% increase from 2025, KFF reported. If it seems like more of your salary is going toward insurance, you’re not wrong. Average wages have increased 3.7% over the past year, so your health insurance bill is growing faster than your take-home pay.
Large companies that provide health insurance benefits to workers are doing their best to slow rising health care costs, said James Gelfand, president and CEO of the ERISA Industry Committee, which represents large employers that pay medical claims on behalf of covered workers, families and retirees.
But he said that’s difficult to achieve when health care spending is growing faster than the overall economy.
“The health care industry is eating up a larger share of each take-home pay dollar,” Gelfand said.
The amount workers pay often depends on how many people their company employs. Workers at small businesses paid an average of $9,687 for their family insurance plan, while workers at businesses with 200 or more employees paid an average of $2,847 less for a comparable insurance plan.
“We see a big increase in 2026” for workers, said Matthew Rae, associate director of KFF’s health care market program. “We could start to see real pressure on employees.”
KFF reported this year on trends in employer health insurance benefits, based on a survey of more than 1,900 public and nonfederal private employers with at least 10 workers. Rae said projections from private-sector benefits consultants suggest that employer benefit cost increases could approach double-digit rates in 2027.
The vast majority of working-age Americans are about to find out how much their employer-based health insurance will cost for 2027 by selecting plans during open enrollment.
Nearly 157 million Americans under the age of 65 have health insurance coverage provided by their employer, making it the backbone of this country’s health care financing system. For comparison, fewer than 20 million Americans were enrolled in the Affordable Care Act health insurance as of February 2026.
Employers Reduce GLP-1 Coverage
Companies are grappling with rising costs of covering the popular class of weight-loss drugs known as GLP-1, sold under brands such as Wegovy and Zepbound.
A year ago, 43% of employers with 5,000 or more employees covered GLP-1s when prescribed for obesity. By 2026, only 33% of these large employers covered GLP-1 for obesity. Most large companies reported that GLP-1 coverage for obesity represents a significant portion of their overall prescription drug spending.
The results of this survey are consistent with what large employers are experiencing, Gelfand said.
“They’ve experimented with it, and now they’re opting out,” Gelfand said of some large employers choosing to end their GLP-1 coverage.
Small employers are even less likely to cover GLP-1 to treat obesity. The survey indicates that 18% of employers with 200 or more employees covered these obesity medications, and only 1% of those companies said they were “very likely” to add coverage in the next 12 months.
Overall spending on prescription drugs is increasing, and more companies are open to the idea of looking for solutions beyond the drug pricing intermediaries known as pharmacy benefit managers. Among employers with 50 or more workers, one in three reported offering workers access to generic mail-order drugs through third-party providers such as Mark Cuban’s Cost Plus Drugs, SingleCare or GoodRx.
Why will insurance costs increase in 2027?
Rae said several factors could accelerate health spending by 2027.
The No Surprises Act, a 2020 law that created an arbitration system to resolve billing disputes between doctors and health insurers, has largely protected consumers from surprise medical bills. The Congressional Budget Office predicted it would save money and lower insurance premiums, but Georgetown University researchers said it had the opposite effect, costing $22.4 billion in additional awards, arbitrator fees and administrative expenses from 2022 to 2025.
Rae said health care actuaries also cited higher spending on behavioral health services and hospital care. The KFF survey did not ask employers about behavioral health costs, but most employers reported being very satisfied or satisfied with workers’ access to behavioral health.
One unknown is the impact of artificial intelligence on healthcare costs. The technology could increase or decrease spending, depending on how it is deployed, Rae said.
In a recent analysis, insurer Blue Cross Blue Shield said hospitals’ use of AI-assisted billing had inflated costs for the insurer. The insurer estimates that AI billing added $942 million in additional costs from 2023 to 2025.
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