Corporate health insurance costs will rise towards 2026
Businesses and corporations that provide health insurance are facing the largest increase in health insurance costs in 15 years.
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If your health insurance bill seems to be rising faster than your paycheck, you’re not wrong.
The average cost of a family health insurance plan offered through the workplace was $26,993 in 2025, an increase of 6% from the previous year, according to the annual Employer Health Benefits Survey released Oct. 22 by KFF, a health policy nonprofit.
In comparison, workers’ wages increased by 4% year-on-year, and inflation rose by 2.7%.
Other studies predict an even sharper rise in prices in 2026. Working-age Americans who have health insurance through their jobs will see the biggest increase in health care costs next year since 2010, according to benefits consultant Mercer.
Rising medical costs and health insurance premiums are a challenge for both employers, who pay the majority of health care costs, and workers, who contribute through payroll deductions.
The average family insurance plan costs close to $27,000 a year, which is “like buying a car every year just to cover a family of four,” said Matthew Ray, associate director of KFF’s healthcare market program. That’s an “astronomical amount.”
As government shutdown discussions in Washington, D.C., focus on the millions of consumers who could lose taxpayer-friendly subsidies for Affordable Care Act health insurance, less attention has been paid to how most Americans obtain insurance.
Approximately 24 million Americans obtain health insurance through the ACA’s federal and state marketplaces. Approximately 154 million working-age adults and their families obtain insurance through their workplaces, which remain the backbone of the nation’s health insurance system.
KFF reported trends in employer health insurance benefits based on a survey of 1,862 non-federal and private employers. According to the study, workers paid $6,850 for family plans in 2025, with employers paying most of the bill, $20,143.
The 6% increase in family health insurance this year is slightly lower than the 7% increase in 2023 and 2024. Over the past five years, the price of family health insurance plans has increased by 26%.
Weight loss drugs and chronic diseases contribute to higher premiums
Employers cite prescription drug spending as one factor in rising premiums in recent years. This is especially true for large employers with weight loss drugs like Wegovy and Zepbound.
Approximately 43% of employers with more than 5,000 workers were applying glucagon-like peptide-1 (GLP-1) drugs for weight loss. And most of these employers said that covering these weight loss drugs had a “significant” impact on their health plans’ prescription drug spending.
Research shows that small companies are less likely to cover these weight loss drugs.
Gary Claxton, senior vice president at KFF, said major employers know weight-loss drugs are a popular option for workers, but the cost often exceeds employers’ expectations.
“It’s not surprising that some people are reconsidering the use of drugs for weight loss,” Claxton says.
In addition to prescription drug spending, companies with 200 or more employees cite other factors that increase premiums as health care costs increase. According to the survey, 30% of employers cited chronic disease, 26% cited increased service utilization, and 22% said hospital prices are accelerating the cost of health insurance.
Employees of small and medium-sized enterprises have higher deductions.
Currently, about 3 in 10 workers have high-deductible health plans that shift some of the cost to the worker. The average deductible is $1,886, meaning consumers must pay that amount before most coverage begins. Deductibles have increased by 17% since 2020, according to the study.
Small businesses are much more likely to claim higher deductibles. The average deduction for businesses with fewer than 200 employees was $2,631, nearly $1,000 higher than the deduction for large businesses.
High-deductible plans are often combined with health savings accounts, where workers can contribute pre-tax wages to an account that covers medical bills and other eligible medical expenses.
Approximately 2 in 3 companies require employees to pay a co-pay when visiting a family doctor. The average out-of-pocket cost was $27 for a primary care physician and $45 for a specialist. Approximately one in five companies also required employees to pay a percentage of their invoices.
Ray said workers could see plans that differ significantly from the averages detailed in the KFF study because there is “huge variation across employers.” “The situation can be very different depending on where you work and where your spouse works,” he said.
