Annual premiums for employer-sponsored family health coverage have climbed to a record $28,303, on average, while workers are shouldering a growing share of the cost.
Overall, family premiums rose 5% in 2026, or $1,310, from 2025, according to new research from KFF. But employees are seeing an even steeper increase in their own contributions. On average, covered workers contributed $7,471 toward the cost of family coverage — up 9%, or $621, from 2025, according to KFF’s annual benchmark health benefits survey of large and small employers. The average deductible for workers with single coverage in a plan with a general annual deductible was $1,955.
Healthcare costs are hitting harder for workers at small firms (those with fewer than 200 workers), KFF found. On average, covered workers in small firms are contributing $9,687 annually toward family coverage this year. That’s $2,847 more than workers in large firms (those with 200 or more employees).
The increases are outpacing wage growth. Over the same period, KFF said, wages rose 3.7% and general inflation rose 2.7%. Meanwhile, inflation has been higher in recent months, with the latest data from the U.S. Bureau of Labor Statistics finding that the consumer price index increased 0.6% on a seasonally adjusted basis in September and rose 3.7% year-over-year.
The result is mounting pressure on household budgets at a time when healthcare affordability is already a major concern. Coupled with federal policy changes affecting the Affordable Care Act and Medicaid, it’s no wonder that people are “so concerned about their healthcare costs,” KFF President and CEO Drew Altman said.
Other recent research from KFF found that healthcare costs are among Americans’ leading financial worries, with 26% saying they are “very” worried about affording healthcare costs for themselves and their families. Roughly three in 10 adults (28%) said that they had skipped or postponed getting healthcare they needed in the past 12 months because of the cost.
Adding to employees’ financial concerns, employers are responding to rising healthcare expenses by shifting more costs to workers. KFF found that among large firms with 200 or more workers, 44% increased the share of premiums employees pay, while 21% increased deductibles or other cost-sharing for most services to address higher projected health costs.
Rising Costs
There may be little relief ahead. The KFF findings come on the heels of other data showing that employers are bracing for even higher health costs in 2027. Consulting firm Aon projects that employer healthcare costs will jump 9.5% in 2027, pushing average costs above $19,000 per employee.
Higher healthcare utilization, an increase in chronic conditions, and the growing use of costly GLP-1 drugs are among the factors driving those increases. Roughly 1 in 8 adults are now taking a GLP-1 drug for weight loss, and it’s putting a growing cost burden on employers: The brand-name injectable drugs typically cost between $1,000 and $1,500 a month for consumers, and employers may foot 70% to 100% of that bill.
And soaring healthcare costs are unlikely to be a temporary challenge for employers.
“Our sense is that this is the new norm,” SHRM President and CEO Johnny C. Taylor, SHRM-SCP, said last month during a panel at the 2026 EBRI–SHRM Health Benefits Symposium. There are a few reasons for that, he said, citing an aging workforce, the increased use of mental health services, and rising pharmaceutical costs, including from GLP-1 drugs.
Those factors are leaving employers caught between keeping benefits affordable for workers, who are dealing with their own sky-high financial stress, and managing increasingly expensive coverage. For HR and benefits leaders, figuring out how to absorb rising healthcare costs without simply shifting the burden to employees is becoming an increasingly difficult balancing act. Taylor described the situation as a “nightmare” for HR and benefits leaders.
Was this resource helpful?
Validate your HR expertise
Earning your SHRM-CP credential makes you a recognized expert and leader in the HR field.
Related Content
Transform HR with mobile technology to streamline workflows, enhance communication, and boost employee engagement across distributed teams.
A new study found that talent development practitioners believe performance-based assessments are more effective at measuring employee learning outcomes than knowledge tests.
As AI makes deeper inroads into organizations, employee concerns about the technology continue to grow. Here's how HR leaders can address the fear of AI among their own staff, as well as in the wider organization.