Employee health insurance premium costs soar 9% this year

Workers will end up paying as much as 9% more toward premiums for employer-sponsored health insurance this year compared to last, according to new KFF data.

Overall, employees will pony up an average of $7,471 for their family insurance plans, which is $629 more than they paid in 2025, the report showed.

These findings come as the healthcare industry faces coverage challenges in the public sector. Affordable Care Act Marketplace premium subsidies have lapsed and that's led to price increases and coverage losses, early data shows. Meanwhile, the start of 2027 heralds new Medicaid eligibility requirements, which experts predict could result in 10 million people losing their coverage.

Turmoil for families receiving their insurance through an employer will likely add to this complexity, according to Drew Altman, KFF president and CEO.

"We have been hearing a lot about Affordable Care Act and Medicaid cuts," Altman said in a press release. "Now add a 9% increase in what workers with employer coverage paid toward family premiums in 2026 to the reasons voters are so concerned about their health care costs."

Rising premium costs are likely to be worse for people employed by small firms, which are those with less than 200 employees. These employees will end up paying an average of $9,687 for their family plans this year, or an average of $2,847 more than their peers working in larger firms with more than 200 workers.

Those numbers only reflect employee contributions. Factoring in employers' contributions to health insurance, those totals rise. For 2026, employers will pay an average of $28,303 for family coverage, up 5% or $1,310 from 2025.

Big firms are considering passing more costs onto employees as a way to cope with these rising expenses. The KFF data showed that 44% of big firms plan to increase the premium contributions their employees make, while 22% said they intend to increase deductibles or other cost-sharing for services.

Employees will likely feel the pinch this year, as employee benefits contributions have grown more quickly than wages. In 2026, wages grew an average of 3.7%, KFF said. That compares to the 9% growth in premium contributions for a family plan. In other words, employees' premium contributions are eating up a bigger portion of their paychecks this year than last.

Predictions for how much employer benefits will cost in 2027 could indicate another year of rising prices being passed onto employees. An August assessment from the Business Group on Health shows a median 9.2% increase in employers' benefits costs for 2027. Although unknown at this time, it is likely employees will shoulder at least some of that cost spike through higher premiums.

The rising cost of healthcare coverage adds another layer of complexity to consumers' overall healthcare affordability concerns. Not only are their insurance premiums costly, but even when patients do have insurance, it's hard to afford the bills.

Data shows having health insurance coverage doesn't adequately protect consumers from medical debt anymore. According to a 2026 report from the Commonwealth Fund, a third of privately insured adults have unpaid medical debt to a healthcare provider.

Sara Heath is an executive editor at Xtelligent Healthcare Media, where she covers patient engagement, healthcare policy and health IT.