Table of Contents
- Family Premiums Hit $27,000 in 2025
- Workers Bear Growing Share of Costs
- Small Businesses Hit Hardest
- Weight-Loss Drugs Fuel Surge
- What’s Next for Employer Coverage?
- Sources
Health Insurance Costs Reach New Highs
In 2025, the average annual cost of employer-sponsored family health insurance hit a staggering $27,000—a sharp jump from previous years, according to a major new survey by KFF, a leading health policy research group.
While employers still cover about 75% of that tab, workers are shouldering more than ever before. And with no relief in sight for 2026, both businesses and employees are bracing for continued financial strain.
Workers Bear Growing Share of Costs
Employees now contribute an average of $6,850 annually—nearly $600 per month—just for family coverage. Add to that high deductibles that can top $2,000 or more, and many families face thousands in out-of-pocket expenses before insurance even kicks in.
“They are left holding the bag,” said Lisa Hunter of United States of Care. “People use less care, they have more medical debt, and they have more health problems because they delay treatment.”
For context, health insurance now consumes about 10% of median household income when premiums and deductibles are combined—a level experts call unsustainable.
2025 Health Insurance Cost Breakdown (Family Plan)
| Category | Annual Cost |
|---|---|
| Total Premium | $27,000 |
| Employer Pays | ~$20,150 (75%) |
| Worker Pays | $6,850 (25%) |
| Average Deductible | $2,000+ |
Small Businesses Hit Hardest
While large corporations can absorb rising premiums, small employers—especially those with fewer than 200 workers—are struggling. In 2025, only 54% of small firms with 10–49 employees offered health coverage at all, down from previous years.
And for those that do? Workers often pay far more. Over a quarter contribute $12,000 or more annually toward family premiums. Many turn to Medicaid or Affordable Care Act (ACA) marketplace plans instead.
“We forget how many people on Medicaid work,” said Gary Claxton of KFF. “For those employers, those are pretty much people they don’t have to cover.”
Weight-Loss Drugs Fuel Surge
A surprising driver of 2025’s cost spike? GLP-1 medications like Wegovy and Zepbound. Nearly half of large employers now cover these drugs for weight loss—up from just 28% in 2024.
But more employees are using them than expected, and their high price tags are straining pharmacy budgets. To control costs, companies are adding hurdles: mandatory dietitian visits, therapy sessions, or BMI thresholds.
“The traditional tools of cost-sharing don’t really work for these extremely expensive drugs,” said USC health policy professor Paul B. Ginsburg.
What’s Next for Employer Coverage?
With Congress gridlocked on healthcare reform, the private market is left to navigate rising hospital prices, drug costs, and inflation alone. Experts warn of a “new wave” of higher deductibles and employee cost-sharing.
Some small businesses are turning to “level-funded” plans—less regulated, riskier alternatives that exclude certain benefits. But these may push sicker, costlier patients into traditional insurance pools, driving premiums even higher.
“Now there is a quiet alarm bell going off,” said KFF CEO Drew Altman. For millions of American families, that alarm is already ringing loud and clear.
