What Your Employer-Based Health Coverage Really Costs
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While employers bear most of that burden, workers also feel the pressure in the premium deductions in every paycheck and higher deductibles.
The total premium for a family plan now averages $27,000 a year, according to KFF’s latest annual Employer Health Benefits Survey. That’s enough to buy a new Toyota Corolla Hybrid. Every. Single. Year.
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Video Transcript
Narrated by Matthew Rae, Associate Director, The Health Care Marketplace Program, KFF
More people get health coverage through an employer than from any other source. That’s 154 million Americans under the age of 65.
The debate over the Affordable Care Act’s expiring enhanced premium tax credits put health care affordability in the national spotlight.
But the issue doesn’t stop with Marketplace enrollees.
In the 2026 midterm election year, the cost of health care is a top economic worry for voters.
And for good reason. The costs add up.
People who get health insurance through an employer typically see a deduction in every paycheck for their share of the premium.
Workers contributed on average $6,850 towards the cost of a family premium in 2025. And, $1,440 for single coverage.
And those payments are just the starting cost.
Most workers also have a deductible that must be met before insurance starts paying for most services.
Workers at smaller companies, those with fewer than 200 employees, typically face higher out-of-pocket deductibles than those at larger companies.
As substantial as those out-of-pocket costs are, the true price tag of health insurance is largely shielded from workers through employer contributions, which on average cover about three quarters of the total premium.
The total annual cost for a family plan, including both worker and employer premium contributions, has been steadily rising, now averaging about $27,000 a year. Up 26% from five years before.
That’s enough to buy a new Toyota Corolla Hybrid. Every. Single. Year.
Rising premiums are straining both workers and employers.
The average annual earnings of a full-time worker was about $62,000. That puts the full cost of a family health insurance premium at over 40% of the typical salary.
Employers single out drug prices as a contributing factor, especially the widely popular and effective GLP-1 medication for diabetes and weight loss.
Add in rising hospital costs and a growing burden of chronic illness and the pressure isn’t letting up anytime soon.
Employer-sponsored insurance is a cornerstone of how Americans access health care. Understanding its full cost and what’s driving it higher matters for workers, employers, and policymakers alike.