Imagine if your employer bought your family a new Honda HR-V or Subaru Crosstrek every year on top of your normal wages. That’s about the price tag of a job-based family health insurance plan.
The average family health insurance plan offered through an employer cost $28,303 this year, an increase of 5% from a year ago, according to the annual employer health benefits survey released Oct. 22 by KFF, a health policy nonprofit.
While companies pick up most of the tab, some are seeking to defray those costs by requiring workers to pay a larger share of the premium and increasing deductibles.
Health Insurance Costs Outpace Workers’ Wages
Employees will pay an average $7,471 this year for a workplace family health plan, an increase of 9% from 2025, KFF said. If it seems like more of your paycheck is going toward insurance, you’re not mistaken. Average wages rose 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 health care cost increases, said James Gelfand, president and CEO of the ERISA Industry Committee, which represent large employers that pay medical claims on behalf of covered workers, families and retirees.
But he said it’s difficult to do when health care expenses grow faster than the overall economy.
“The health care industry is gobbling more of every dollar of take home pay,” Gelfand said.
The amount workers pay often depends on how many people their company employs. Workers at smaller companies paid $9,687 on average toward their family insurance plan while workers at companies with 200 or more employees paid $2,847 less on average for a comparable insurance plan.
“We’re seeing a big increase in 2026” for workers, said Matthew Rae, KFF’s associate director of the health care marketplace program. “We could begin to see real pressure on employees.”
KFF reported trends in employer health insurance benefits this year based on a survey of more than 1,900 non-federal public and private employers with at least 10 workers. Rae said projections by private-sector benefits consultants suggest employer benefits 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 health insurance will cost for 2027 as they select plans during open enrollment.
Nearly 157 million Americans under age 65 take employer-provided health insurance coverage, making it the backbone of how this nation pays for health care. By comparison, fewer than 20 million Americans were enrolled in Affordable Care Act health insurance as of February 2026.
Employers Scale Back GLP-1 Coverage
Companies have grappled with the rising cost of covering the popular class of weight-loss drugs known as GLP-1s sold under brand names such as Wegovy and Zepbound.
A year ago, 43% of employers with 5,000 or more workers covered GLP-1s when prescribed with obesity. In 2026, just 33% of those large employers covered GLP-1s for obesity. Most large companies said GLP-1 coverage for obesity added a significant amount of their overall prescription drug spending.
Those survey results jibe with what large employers are experiencing, said Gelfand.
“They experimented with it, and now they’re pulling back,” Gelfand said of some large employers choosing to discontinue their GLP-1 coverage.
Smaller employers are even less likely to cover GLP-1s to treat obesity. The survey said 18% of employers with 200 or more employees covered these drugs for obesity, and just 1% of those firms said they were “very likely” to add coverage over the next 12 months.
Overall spending on prescription drugs is increasing, and more companies are open to the idea of looking for solutions beyond drug-pricing middlemen known as pharmacy benefit managers. Among employers with 50 or more workers, one in three said they offer workers access to mail order generic drugs through a third party vendors such as Mark Cuban’s Cost Plus Drugs, SingleCare or GoodRx.
Why Will Insurance Costs Rise in 2027?
Rae said several factors might accelerate health care spending on 2027.
The No Surprises Act, a 2020 law that created an arbitration system to settle billing disputes between doctors and health insurers, has largely protected consumers from surprise medical bills. The Congressional Budget Office projected that it would save money and lower insurance premiums, but Georgetown University researchers said it has had the opposite effect, costing $22.4 billion in extra awards, arbitrator fees and administrative expenses from 2022 through 2025.
Rae said health care actuaries also have cited higher spending on behavioral health services and hospital care. The KFF survey did not ask employers about behavioral health costs, but most employers said they were very satisfied or satisfied with workers’ access to behavioral health.
One unknown is how artificial intelligence will impact health care costs. The technology could increase or decrease spending, depending how it’s deployed, Rae said.
In a recent analysis, the insurer Blue Cross Blue Shield said hospitals have used artificial intelligence-assisted billing has inflated costs for the insurer. The insurer estimated AI billing has added $942 million in extra costs from 2023 through 2025.
Reporting by Ken Alltucker, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
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