Employer Health Insurance Costs Rise for Businesses and Workers

Employer-sponsored health insurance costs are rising for both businesses and workers, with projections suggesting significant increases for 2027 plans. A survey by the Kaiser Family Foundation found that worker contributions for family coverage rose an average of 9% to $7,471 annually, while average family premiums for employers increased 5% to $28,303.

To mitigate these expenses, 44% of large employers have increased worker contributions, while others have raised deductibles or narrowed provider networks. Consulting firms AON and Marsh project premium increases of 9.5% and 8.2% respectively for the coming year. The Business Group on Health predicts a median premium increase of 9.2%.

Cost drivers include higher service utilization, rising prescription drug prices—specifically GLP-1 weight loss drugs—and the use of artificial intelligence by providers to maximize billing. While Phifer Inc. maintained flat costs through on-site clinics and direct contracting, industry leaders suggest federal intervention, such as hospital price caps and deductible limits, may be necessary to control spending.