Employer family premiums grew yet again in 2026, increasing by 5% to $28,303 on average, according to a new report from KFF.
Researchers at KFF polled 1,937 public and private employers with at least 10 workers for its annual Employer Health Benefit Costs Survey. The study found that individual premiums also grew by 5% to $9,804, according to the study.
The amount that workers are contributing to their premiums is also on the rise, the survey found. Contributions to family coverage rose 9% between 2025 and 2026 to $7,471 for the year, growth of $621. The average annual contribution in single coverage was $1,672.
By comparison, workers’ wages increased by 3.7% in 2026, and inflation increased by 2.7%, though inflation has accelerated more quickly in recent months, the researchers said.
Matthew Rae, associate director of the healthcare marketplace program and one of the study’s authors, told Fierce Healthcare that while a 5% increase isn’t nothing, it is less than some of the double-digit hikes that actuaries and consultants have feared.
“I think that cuts against a thought that, like, the sky is falling on employer-sponsored health insurance,” Rae said.
However, he added that while the number may be lower than some projections; it takes a lot of work for human resources teams to get a 5% increase. That means they’re modifying benefits and actively shopping for better deals from the plans and other vendors with which they partner.
The significant bump for workers’ costs comes after several years of employers aiming to reduce cost-shifting to their employees. Rae noted that while premium contributions are rising by 9%, deductibles have been largely flat. The average deductible in 2026 was $1,955, up slightly from an average of $1,886 in 2025.
Employers are also pursuing new, variable copayment plan models, such as UnitedHealthcare’s Surest, as a way to manage cost without needing to massively hike deductibles or other cost-sharing, Rae said.
“Employers offer health benefits because they want to offer benefits, and if people don’t like them, it’s not a benefit,” he said. “So employers spend a lot of time thinking about how to how to make it an attractive package.”
Other findings in the study include that 18% of large firms cover GLP-1 medications for weight loss, generally with certain restrictions such as patient participation in a weight management program or a meeting with a clinician. Close to a third (29%) of those surveyed who offer GLP-1 coverage said the drugs have had a significant impact on their prescription drug spend, while 27% said these medications had a moderate impact on prescription spending.
Among the employers that don’t offer coverage, relatively few appear to change their minds. Just 1% said they were very likely to add coverage for GLP-1s for weight loss, while 13% said they were somewhat likely to do so.
Rae said GLP-1 coverage is less of a clear trend line and more of a “revolving story with multiple acts.” For example, the price of these drugs has come down significantly, and more people have access to them through direct-to-consumer offerings rather than their traditional pharmacy plan.
“You’re trying to balance the affordability and the demand for these drugs with the fact they’re spending a ton of money,” Rae said, “so I’m not totally surprised with the we have a slight retreat on large employers offering GLP-1 coverage.”
In addition, 49% of large firms surveyed said they receive adequate information about rebates or other payments from drug manufacturers to their insurer or pharmacy benefit manager, and 65% said they have sufficient data on their drug utilization.
Rae said this is notable in a policy environment where lawmakers and regulators are highly focused on transparency. Many employers have access to the data, they just need to determine where to go with that information.
“It sounds like many employers feel like they’re there, and the question is, let’s figure out the next step, which is whatever you want to do with your networks to actually take advantage of this,” he said.
And, that despite that fact that there are plenty of people in the insurance industry who are bullish on the potential of individual coverage health reimbursement arrangements, or ICHRA, to change the game on affordability, employers aren’t making the switch in droves just yet.
Among employers who aren’t offering benefits, just 11% have put an ICHRA in place to help their employees find coverage on the individual marketplaces, per the survey. Rae said that the largest potential for ICHRA so far has been for smaller firms, especially given volatility in the small-group market.
And while the cost equation with ICHRA may work for a small business, there are potential trade-offs around networks and access in these exchange plans, he said.
“I think ICHRA still plays a place going forward,” Rae said. “We’re not seeing the big double-digit increases into ICHRA.”