Employer-provided healthcare premiums rose to an average of $27,000 this year
Coverage of GLP-1s is among the drivers for rising premiums.
Premiums for employer-provided health insurance plans reached nearly $27,000 this year, and are expected to rise even more in 2026 amid rising costs of care.
Family premiums for these plans, for which the costs are shared between the employer and employee, grew 6% to $26,993 in 2025, according to KFF’s annual survey of more than 1,800 employers, released Wednesday. That compares with 7% increases in each of the previous two years. It’s also more than double the overall inflation rate, which is 2.9% as of the most recent reading.
“There is a quiet alarm bell going off,” Drew Altman, CEO of KFF, said in a statement.
High costs of brand-name prescription drugs, rising hospital costs, and tariffs have employers anticipating an even bigger bill next year, respondents told KFF. Employers expect costs to rise by as much as 9% in 2026, a separate survey by Mercer found.
Employers told KFF that one of the drivers of rising premiums is coverage of weight-loss and diabetes drugs made by Eli Lilly and Novo Nordisk. Despite being expensive and popular, employers generally increased coverage for them from 2024 to 2025, with larger employers more likely to cover them, the survey found.
The news comes as President Trump is putting pressure on drugmakers to lower prices for Americans, with tariffs looming as the administration’s remedy of choice.
So far drugmakers have been able to claim victories on that front by offering direct-to-consumer prices, which are lower because they skip over middlemen, including insurance companies. This is a popular model for GLP-1s, with DTC prices at roughly $300 to $500 a month compared to the upward of $1,000 typically charged to insurance for the same drug.
But other brand-name, life-saving drugs are much more expensive and have cash prices that would be difficult for a patient to swallow even if it were half of what is typically billed to their insurance. Some employers are exploring ways to subsidize those DTC cash-pay prices. Weight Watchers, for one, recently announced that it’s setting up a way for employers to do that with GLP-1s.
