The cost of family family health insurance provided through employers has exceeded $28,000 annually this year. As the pace of premium increases significantly outpaces wage growth, the financial burden on workers is steadily growing.
According to the ‘Employer Health Benefits Survey’ released on the 22nd by KFF, a non-profit health policy organization, the average annual premium for employer-sponsored family health insurance reached $28,303 this year, a 5% increase from last year. This means workers are paying the price of a decent new car every year just for health coverage.
While employers cover the majority of the premiums, the amount paid directly by employees is also rising rapidly. This year, the average contribution for workers enrolled in family plans was $7,471, a 9% increase from last year. During the same period, the average wage increase was limited to 3.7%, meaning the rate of increase in premium burdens was more than double that of wages.
There is also a significant gap depending on company size. Employees at small businesses paid an average of $9,687 for family health insurance, which was $2,847 more than workers at companies with 200 or more employees.
The KFF survey was conducted targeting approximately 1,900 private and non-federal public institutions with 10 or more employees. With about 157 million Americans under the age of 65 currently enrolled in health insurance through their employers, workplace insurance remains a core pillar of the medical care system.
To curb soaring medical costs, companies are raising employee-paid premiums and deductibles while scaling back coverage for weight-loss drugs. Among large enterprises with 5,000 or more employees, the proportion covering GLP-1 receptor agonists like Wegovy and Zepbound for weight loss purposes decreased from 43% last year to 33% this year. Looking at all companies with 200 or more employees, the coverage rate was a mere 18%.
The burden is likely to grow even heavier next year. KFF noted that private employee benefits consulting firms expect the growth rate of corporate health insurance costs to approach double digits by 2027.
Rising hospital bills and behavioral health service expenditures are also cited as factors driving up premiums. Additionally, the expanded use of artificial intelligence (AI) in medical claims processing is introducing new cost issues. Major health insurer Blue Cross Blue Shield estimated that AI-utilized hospital claims added $942 million to its costs between 2023 and 2025.
Ultimately, a structure is intensifying where workers’ actual disposable income is squeezed because health insurance premiums increase faster than wages, even if wages go up. In particular, ahead of the 2027 workplace insurance open enrollment period at the end of this year, how much higher employee-paid premiums and deductibles will climb remains a major concern.
