Family premiums for employer-sponsored health insurance in the United States reached an average of $26,993 in 2025, according to KFF’s annual health benefits survey. Workers are contributing about $6,850 toward these family coverage costs each year, with employers covering the remaining $20,143.
The increase in family premiums was 6% from last year, or $1,408. This rate of growth is similar to previous years but remains above both general inflation and wage growth for the same period.
Insurers are requesting double-digit premium increases in small-group and individual markets for next year. This trend could signal significant increases in large-group markets as well. Employers continue to point to rising prescription drug prices as a key driver of higher premiums.
KFF’s findings show that more than one-third (36%) of large firms believe prescription drug prices have contributed “a great deal” to recent premium hikes. Other major factors cited include new prescription drug coverage (22%), chronic disease prevalence (30%), increased use of medical services (26%), and hospital pricing (22%).
“There is a quiet alarm bell going off. With GLP-1s, increases in hospital prices, tariffs and other factors, we expect employer premiums to rise more sharply next year,” said Drew Altman, President and CEO of KFF. “Employers have nothing new in their arsenal that can address most of the drivers of their cost increases, and that could well result in an increase in deductibles and other forms of employee cost sharing again, a strategy that neither employers nor employees like but companies resort to in a pinch to hold down premium increases.”
Approximately 154 million Americans under age 65 rely on employer-sponsored health insurance plans. The latest survey includes data from over 1,800 employers with at least 10 workers.
When it comes to GLP-1 weight loss drugs such as Wegovy, about one-fifth (19%) of large firms cover these medications for weight loss purposes this year. Among the largest employers—those with at least 5,000 workers—43% offer coverage for these drugs under their largest plan, up from 28% last year.
Many employers impose conditions on GLP-1 drug coverage; roughly one-third require enrollees meet with professionals or participate in lifestyle programs before obtaining coverage for these medications. Despite such measures, most large firms offering these drugs say their costs have exceeded expectations and had a significant impact on overall prescription drug spending.
Rising costs may prompt some companies to reduce or restrict coverage further. While many large employers recognize employee interest in GLP-1 drug coverage, only a small share not already providing it say they are very likely to start next year.
Nearly three out of ten covered workers are now enrolled in high-deductible health plans eligible for Health Savings Accounts (HSAs). The average deductible for single coverage stands at $1,886 this year—an increase from last year’s $1,773—and deductibles have risen by 17% since 2020.
Workers at smaller firms face higher average deductibles compared to those at larger organizations ($2,631 vs. $1,670). Over half of employees at small businesses now confront deductibles above $2,000; more than one-third face deductibles exceeding $3,000.
Most workers also encounter substantial out-of-pocket maximums: nearly three-quarters must pay over $3,000 before reaching their limit; about one-fifth face maximums above $6,000.
The report highlights persistent gaps faced by part-time and low-wage workers seeking health benefits through employment. Only around one-quarter of large firms and fewer small firms extend health benefits eligibility to part-time staff members. Coverage rates among low-wage workplaces remain lower compared with those employing fewer low-wage workers.
Medicaid serves as an important source of insurance for employees without access to employer-sponsored plans; about one-third of small businesses not offering benefits consider Medicaid “very important” for worker coverage needs.
Individual Coverage Health Reimbursement Arrangements (ICHRAs), designed as an option allowing employees to buy insurance through ACA Marketplaces or individual policies using employer funds instead of traditional group plans have seen little adoption among small businesses. Only about nine percent reported offering such funds this year—a figure unchanged from last year—with few others planning adoption soon.
KFF is an endowed nonprofit organization focused on providing information related to health policy through research initiatives and journalism efforts.
