Workers now pay $7,471 a year for family health coverage — and costs are set to climb again

American workers with employer health insurance are paying more for family coverage than ever before — and the bill is rising faster than their paychecks. The average worker's share of a family health plan hit $7,471 this year, a 9% jump of $621 from 2025, according to KFF's 2026 Employer Health Benefits Survey released Wednesday. Wages, by comparison, grew just 3.7%.

The survey, now in its 28th year, covers employer-sponsored insurance that reaches almost 157 million Americans under age 65. It found that total annual premiums for family coverage reached $28,303 — up 5% from 2025 — with workers picking up 27% of that cost on average. For single coverage, the average total premium was $9,804, with workers contributing $1,672, or 18% of the cost.

The squeeze is not just in premiums. The average deductible for single coverage — the amount a worker must pay out of pocket before insurance kicks in — stood at $1,955 this year. Over the past five years, average family premiums have risen 28%, compared with a 26.9% increase in workers' wages and 24.4% inflation, according to KFF.

The burden falls unevenly. Workers at smaller firms — those with 10 to 199 employees — face a contribution rate of 37% for family coverage, compared with 25% for workers at larger firms. Nearly a third of covered workers at smaller firms must contribute more than half the premium for family coverage, versus just 6% at larger firms. Workers at firms with larger shares of lower-wage employees also pay a higher proportion of the premium.

Geography matters too. Average family premiums are highest in the Northeast, at $31,378, and lowest in the South, at $26,702, according to KFF.

The pain is already visible at individual workplaces. At OSI Packaging in Shreveport, Louisiana, workers saw their monthly premiums jump to $300 in 2026, up $100 from the prior year, according to CNN. Controller Julie Eason said the company, which only began offering health coverage in May 2025 to help fill job openings, was able to hold out-of-pocket costs steady — but may face harder choices if expenses rise again.

It's their healthcare. It's only right to let them decide.— Julie Eason, Controller, OSI Packaging

At the University Club of Michigan State University, human resources director Debbie Barosko is weighing two unpleasant options for 2027: a nearly 13% premium hike with the deductible held at $1,000, or a smaller 7% premium increase paired with raising the deductible to $1,500. Her 30 plan members already absorbed a 9% premium increase and a doubling of their deductible this year after the club's longtime insurer stopped operating, according to CNN.

It's hard to stomach for the employees and the employer when you're increasing the premiums but diluting the benefits.— Debbie Barosko, HR Director, University Club of Michigan State University

Looking ahead to 2027, the pressure shows no sign of easing. Employers' healthcare costs are forecast to jump 9.5% next year, according to Aon, an insurance brokerage firm, a projection CNN reports is in line with estimates from other consulting firms and industry groups. Aon's head of US health analytics, Todor Penev, said employers have largely exhausted the easier cost-control options and some must now turn to more drastic measures.

The affordability crisis is real. It's going to be much more noticeable with annual enrollment.— Todor Penev, Head of US Health Analytics, Aon

Among the drivers of rising costs: increased use of health services, expensive cancer treatments, and surging demand for GLP-1 obesity medications such as Eli Lilly's Zepbound and Novo's Wegovy, according to CNN. Employers are already pulling back on covering those drugs for weight loss — coverage fell to 60% this year from 72% in 2025, according to the Business Group on Health, an employer advocacy organization whose members skew toward larger companies.

Ultimately, employers offer health benefits that they hope employees will value, and many employees see GLP-1 coverage as an important part of that. If they can find ways to provide that coverage at a lower cost, they're likely to do it.— Matthew Rae, Associate Director, KFF

Some employers are exploring whether to help workers buy GLP-1 drugs directly from manufacturers or through partners such as Costco's pharmacy, potentially subsidizing purchases through Health Reimbursement Arrangements, according to CNN. Cash prices for the medications range from $149 to $699 depending on the drug and dosage.

For workers navigating open enrollment, benefits experts say the stakes of reading the fine print have never been higher. Preferred-network designations, drug formulary changes, and shifting cost-sharing structures mean that a plan that worked last year may cost significantly more in practice this year.

The likelihood that people will see changes makes it critically important for them to invest the time to understand what the changes mean for them.— Jim Winkler, Chief Strategy Officer, Business Group on Health

Why it matters — For the 157 million Americans who get health insurance through work, rising premiums and deductibles are consuming a growing share of paychecks — and employers warn the squeeze will intensify again when 2027 plans take effect.

Reported by nytimes.com, kff.org, cnn.com