A new KFF survey puts the typical annual price tag for a family employer plan at $28,303 this year, 5% higher than in 2025. Employers still cover most of the tab, but employees paid 9% more than a year ago, averaging $7,471. The burden is heavier at small companies, where workers chip in $2,847 more than employees at large employers with 200 or more staff.
Employer coverage is the backbone for almost 157 million Americans under 65. The report lands as affordability sits at the center of next month's midterm elections.
"And what they are feeling when they are trying to afford their employer-sponsored health insurance doesn't always match the political moment."
Over 40% of employers reported increasing the share of premiums that employees pay. Rae noted that health insurance is part of total compensation, so if the labor market loosens, companies may lean more on employees to pay. To avoid that, he said employers could trim benefits or restrict who qualifies. He also pointed to a steady climb in inpatient hospital costs as the biggest driver of premiums, with employers paying more than they expected for GLP-1 drugs and eyeing specialty drug management into next year.
Among large employers that still cover GLP-1s for weight loss, about one in five offer that benefit, and most of those report prescription spending is feeling it, with 29% calling the impact significant and 27% moderate. Coverage often comes with new guardrails too, with most now requiring employees to meet with a clinician or put a lifestyle plan in place to get these medicines. Examples cited include Eli Lilly's Foundayo and Novo Nordisk's Wegovy.
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Interim HealthCare's Twin Cities operation said GLP-1 coverage was not a major swing factor this year, but it did see a 4% rise linked to mental health coverage and hospital care. The branch employs roughly 150 people and insures about 180.
The office split this year's increase with employees, according to Cory Springhorn, the Twin Cities branch's human resources director. "If we could keep increases in the low single digits like this year, we'd be happy," Springhorn said. "We are bracing ourselves for the worst because I know employers are getting renewals at 10%, 15%, 20% this year." To contain costs, the company is offering some subscription services beyond its core provider and exploring self-insurance.
Big employers are also widening access to care: over one third added new virtual providers in the past two years, and 20% added new in-person provider options or facilities. To rein in pharmacy bills, companies are steering workers to alternatives such as GoodRx, SingleCare, and Mark Cuban Cost Plus.
Healthcare is taking a bigger bite out of compensation budgets. That can pressure margins for employers facing 10 to 20 percent renewal quotes, even as more plan costs are shifted to workers. The bottom line: watch premium shares and drug coverage design during renewals, because that is where cost control shows up first - in company expenses and in your out-of-pocket line.
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