Businesses and companies that provide health care coverage are facing the largest spike in health insurance costs in the past 15 years
If it seems like your health insurance bill is rising faster than your paycheck, you're not mistaken.
The average cost for a family health insurance plan offered through the workplace was $26,993 in 2025, an increase of 6% from a year ago, according to the annual employer health benefits survey released Oct. 22 by KFF, a health policy nonprofit.
By comparison, workers wages grew 4% and inflation is up 2.7% from a year ago.
Other surveys project steeper price hikes are on the way for 2026. Working-age Americans who get health insurance through their jobs will see the largest health cost increases next year since 2010, according to Mercer, a benefits consultant.
The rise in the costs of health care and health insurance premiums are a challenge to both employers who underwrite the bulk of the tab and workers who contribute through payroll deductions.
With the average family insurance plan approaching $27,000 per year, "it's like buying a car every year just to cover a family of four," said Matthew Rae, associate director of KFF's health care marketplace program. It's "an astronomical amount of money."
As the government shutdown debate in Washington D.C. focuses on the millions of consumers who might lose lucrative taxpayer subsidies to Affordable Care Act health insurance, there's been less attention to how most Americans get coverage.
Nearly 24 million Americans get health insurance through the ACA federal and state marketplaces. About 154 million working-age adults and their families get coverage through the workplace, which remains the backbone of the nation's health insurance system.
KFF reported trends in employer health insurance benefits based on a survey of 1,862 non‑federal public and private employers. In 2025, workers paid $6,850 for family plans while employers paid most of the bill, $20,143, the survey said.
The 6% rise in family health insurance this year is slightly less than the 7% hikes in 2023 and 2024. Over the past five years, the price tag for a family health insurance plan jumped by 26%.
Weight loss drugs, chronic disease contributed to rising insurance bills
Employers cited prescription drug spending as one factor driving insurance costs higher in recent years. That was especially true among larger employers who covered weight-loss drugs such as Wegovy and Zepbound.
About 43% of employers with 5,000 or more workers covered glucagon-like peptide 1, or GLP-1, medications for weight loss. And most of those employers said covering these weight-loss medications had a "significant" impact on the health insurance plan prescription drug spending.
Smaller companies were less likely to cover these weight-loss medications, the survey said.
Large employers know weight-loss drugs are a popular option for workers but the costs often exceed what employers expect, according to Gary Claxton, KFF senior vice president.
"It's not a surprise that some are rethinking access to the drugs for weight loss," Claxton said.
In addition to prescription drug spending, companies with 200 or more workers cited other factors behind higher insurance costs, which rise when spending on medical care increases. The survey said 30% of employers named chronic disease, 26% cited higher use of services and 22% said hospital prices accelerated the cost of health insurance.
Workers at smaller companies face higher deductibles
About three in 10 workers are now enrolled in high-deductible health plans that shift some costs to workers. The average deductible was $1,886, which means consumers must pay that much before most coverage kicks in. Deductibles have jumped 17% since 2020, the survey said.
Small companies are much more likely to charge a higher deductible. The average deductible at companies with fewer than 200 workers was $2,631 - nearly $1,000 more than what larger companies charged.
High-deductible plans are often paired with health savings accounts that allow workers to contribute pre-tax wages to an account that covers medical bills and other qualifying health expenses.
About two in three companies require workers make a copayment when visiting a primary-care doctor. The average copay was $27 for a primary care doctor and $45 for a specialist. And about 1 in 5 companies required workers to pay a percentage of the bill.
Rae said there is a "tremendous amount of variation across employers" so workers might see plans that are far different from the averages spelled out in KFF's survey. "Things can look really different depending on where you work or where your spouse works," he said.