Dennis Hendrickson
Jobs & Work · October 22, 2026

Employer Health Insurance Premiums Rise 5% as Workers Pay More Out of Pocket

A new KFF survey puts the average family health plan at $28,000 a year, and workers' share of that cost grew almost twice as fast as the overall premium.

Employer health insurance premiums went up about 5% this year, according to a new survey from KFF, pushing the average family-of-four plan to $28,000 a year. That is the headline number out of two reports released Thursday, one from KFF on what employers are paying and one from the Commonwealth Fund on what that cost does to the people who have the insurance. Workers now pay about $7,000 of that $28,000 average themselves, and the portion workers pay grew 9%, close to double the rate of the overall premium increase.

A Good Plan Doesn't Mean Cheap Care

Joseph Babbitt is a senior financial controller at West Plains Veterinary Supply in Springfield, Missouri, a company of about 50 people that distributes pet food, toys and vet supplies. His employer covers most or all of the monthly premium across several plan options, which puts him ahead of most workers. He still feels it. "Everybody talks about health care and how much it's costing them," he says.

The deductible, what you pay before insurance starts covering visits and procedures, is where it shows up. Babbitt, now 60, remembers when his deductible was $250 or $500. Now it is $5,000. "That seems like a lot," he says. "We are the only country on our planet that forces people into bankruptcy because they get sick."

The Hidden Pay Cut Inside Your Premium

Matthew Rae, associate director for the Health Care Marketplace Program at KFF, puts the family premium in blunt terms: "It's basically the cost of a new car every year just to keep a family of four insured." The 5% increase tracks roughly with wage growth and inflation, which Rae calls "a period of modest growth" compared to past years. But the number he flags is the worker-side one, up 9%: "If this is the beginning of a shift of costs onto workers, that would be a big deal in terms of affordability."

That shift matters for anyone weighing whether to stay in a job or leave to start a business. Right now, employer coverage absorbs most of that $28,000, with the worker covering $7,000. Give that up to work for yourself, and you are buying the whole thing, at a moment when the worker-paid share is already climbing faster than the total premium.

What Rising Premiums Do to a Small Employer's Margin

In my insurance agency, I see this same dynamic every renewal season, just from the employer side instead of the employee side. A company paying most or all of a group health premium for its staff absorbs that 5% increase before a single customer notices. For a business the size of West Plains Veterinary Supply, around 50 employees, that adds real dollars to the budget with nothing to show for it in sales.

Union Pacific's latest earnings show the same squeeze from a different direction: profit grew 16% and revenue rose 15% to $7.2 billion, but rising fuel costs kept the margin from expanding as fast as revenue did. Rising input costs, whether it's diesel or a health premium renewal, eat into margin even when the top line looks good, and the owner is the one who decides whether to absorb it, pass it to customers, or cut somewhere else.

Coverage Losses Add to the Pressure

The Commonwealth Fund's "The State of Health Insurance Coverage in 2026," led by Sara Collins, found that even among workers who have coverage, about 43% skipped care in the past year because of cost, and 31% carry medical debt. The overall uninsured rate rose over the last two years, which Collins ties to the expiration of extra federal subsidies for ACA marketplace plans and people losing Medicaid after pandemic-era protections ended. Work requirements set to take effect next year are projected to push millions more off Medicaid.

That is a jobs issue too. Fewer people with coverage, combined with work requirements tied to Medicaid, means more people juggling a job search or a new business around the question of how they'll cover a doctor's visit. Collins says there is broad appetite for a fix: "We asked people whether the federal government has a responsibility to ensure that all Americans have coverage and nearly three quarters said yes to that, that included about 45% of Republicans, 93% of Democrats and 76% of independents."

What to Watch at Your Next Open Enrollment

If you have employer coverage, don't just check the premium line, check the deductible and how much of the premium increase is landing on you versus your employer. A 5% total increase that's really a 9% jump in your share is the number that tells you what's actually happening to your paycheck.

If you're thinking about starting a business and walking away from employer coverage, price out an ACA marketplace plan before you give notice, not after. And if you run a small business paying most of your team's premium, ask your broker for the renewal number early. A 5% group increase is a budget line you want to see coming, not one that shows up the week before it's due.

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