Workers Already Pay Nearly $7,500 a Year for Family Health Insurance, and a New Forecast Suggests 2027 Could Bring Even Tougher Choices
Millions of Americans who receive health insurance through their jobs could face another difficult enrollment season as employers prepare for rising medical expenses in 2027. In its October 22 report, CNN examined forecasts suggesting employers will face another substantial increase in healthcare costs, potentially pushing more of the financial burden onto employees. The concern extends beyond monthly insurance premiums because workers may also encounter higher deductibles, increased medication expenses, or changes to their coverage.
The latest projections arrive after employees already experienced a significant increase in what they paid for family health insurance during 2026. Companies are trying to keep benefits affordable while managing higher medical bills and prescription costs. Their decisions over the coming months could determine whether workers absorb more expenses through their paychecks, pay more when seeking treatment, or encounter narrower choices about their healthcare.
The 2027 Forecasts Point to Another Year of Steep Increases
Aon, a global professional services and insurance brokerage firm, projects that US employers’ healthcare costs will increase by 9.5% in 2027 before cost-management measures are applied. According to Aon’s August 2026 forecast, average healthcare costs could exceed $19,000 per employee. The projection would extend a four-year period in which employer healthcare costs have faced unusually rapid increases.
Other industry forecasts point in the same direction, although their estimates differ. Marsh, for example, projected an average 8.2% increase in employer health benefit costs for 2027, even after accounting for planned cost-reduction measures, according to its September 2 announcement. These figures are forecasts rather than final bills, and they measure overall benefit costs rather than guaranteeing that every worker’s personal insurance premium will increase by the same percentage.
The Bills Were Already Larger in 2026
The latest figures from KFF, a health policy research organization, show how much employer-sponsored coverage costs before the next round of increases takes effect. Its 2026 Employer Health Benefits Survey found that the average annual premium for family health insurance reached $28,303, a 5% increase over 2025. That figure represents the combined cost paid by employers and workers, not the amount an individual employee pays alone.
Workers contributed an average of $7,471 toward those family premiums in 2026, according to the same survey. Their average contribution increased by $621 compared with the previous year, representing a rise of approximately 9%. The difference between the total premium increase and the employee contribution increase illustrates why workers can experience a substantial financial change even when the overall insurance premium grows at a slower rate.
Employees’ Insurance Contributions Are Rising Faster Than Their Raises
The gap between healthcare costs and earnings creates another challenge for household budgets. KFF’s findings show that workers’ average contribution toward family health insurance rose 9% in 2026, while average wages increased by 3.7%. General inflation was 2.7% over the same period, adding another point of comparison for households already managing everyday expenses.
That difference does not mean every worker received a 3.7% raise or experienced precisely the same insurance increase. It does, however, highlight why healthcare expenses can consume a larger portion of a paycheck even when employment income is growing. As enrollment decisions approach, employees may have to assess their insurance options alongside housing costs, groceries, childcare, transportation, and other recurring bills.
Employers Still Pay Most of the Total Premium
Rising employee contributions do not mean companies have stopped paying the larger portion of workplace health insurance costs. KFF found that employees covered approximately 27% of family premiums in 2026, while employers paid the remainder on average. For individual coverage, employees contributed an average of 18% of the total premium.
Employers therefore continue to absorb a substantial part of the increase, but even a relatively small shift in the balance can affect workers’ finances. Companies may choose to raise employees’ monthly contributions, modify how expenses are shared when someone receives treatment, or redesign their benefits to control overall spending. The resulting changes can make two insurance plans with similar monthly premiums feel very different when an employee actually needs medical care.
Small Businesses Face Especially Difficult Choices
Workers at smaller companies can face an even heavier burden because their employers often have fewer resources to spread healthcare expenses across a large workforce. An Associated Press report examining KFF’s survey found that employees at businesses with 10 to 99 workers contributed an average of $9,687 toward family coverage in 2026. At companies with at least 200 employees, the corresponding employee contribution averaged $6,840.
The differences extend beyond premiums. According to the same reporting, average deductibles for individual workers were $2,624 at smaller workplaces, compared with $1,772 at larger companies. These figures do not establish what every small-business employee will pay, but they demonstrate how company size can shape the affordability of employer-sponsored coverage.
For small employers, maintaining competitive benefits may also be important when recruiting and retaining staff. Increasing employee contributions can help control company expenses, but it may leave workers with less money available for other needs. Some businesses consequently face a difficult balance between preserving coverage, managing payroll-related costs, and keeping their benefits attractive to current and prospective employees.
A Louisiana Company Shows How Quickly Costs Can Change
The situation at OSI Packaging, a company in Shreveport, Louisiana, illustrates how rising insurance expenses can affect a relatively small workforce. According to the reporting, employees saw their monthly health insurance premiums reach $300 in 2026, an increase of $100 from the previous year. The company has six employees enrolled in its health plan.
OSI Packaging began offering health coverage in May 2025 to help fill job openings. The company has sought to provide employees with useful benefits without making coverage prohibitively expensive, but another increase could force management to reconsider its options. The company may need to weigh higher premiums against other ways of sharing insurance expenses if its costs rise again in 2027.
A Michigan State University Club Faces a Premium-versus-Deductible Decision
The University Club of Michigan State University faces a different version of the same problem. Its human resources director, Debbie Barosko, must decide whether employees should face a premium increase of nearly 13% in 2027 while retaining a $1,000 deductible, or accept a $1,500 deductible that would reduce the premium increase to approximately 7%. The choice remains a trade-off between keeping insurance costs predictable from paycheck to paycheck and limiting what employees must pay before their coverage begins sharing eligible medical expenses.
The decision follows an already difficult year for the club’s 30 workers enrolled in the plan. Their premiums rose 9% in 2026, and their deductible doubled after the organization’s longtime insurer stopped operating. For the club, choosing a plan that costs less upfront could help manage expenses, but asking employees to shoulder a higher deductible could make healthcare more expensive when they need it.
Higher Medical Use and Expensive Treatments Are Driving Costs
Insurance companies and benefit consultants point to several pressures behind the latest forecasts. More frequent use of medical services, increasing prices for care, costly prescription drugs, and the growing number of expensive claims can all raise the amount employers must spend on health benefits. Chronic health conditions and advanced treatments also contribute to the challenge of predicting annual healthcare expenses.
KFF Health News examined these pressures in its October 22 report on employer-sponsored health coverage, noting that employers have been trying several approaches to contain spending. Those efforts include changing insurers, raising deductibles, requiring prior authorization for some services, and narrowing provider networks. Such measures can help companies manage their budgets, but they may also change how much flexibility employees have when choosing care.
Cancer Treatment Is a Major Source of Employer Healthcare Spending
Some medical expenses are particularly difficult for employers to manage because treatment can require sophisticated care, expensive medications, or repeated specialist visits. In its 2027 employer healthcare strategy survey, Business Group on Health identified cancer as the leading condition driving healthcare spending among surveyed employers. Seventy percent of respondents named cancer as their top cost driver in 2026, compared with 58% in 2025.
The survey also identified musculoskeletal and cardiovascular conditions among the leading contributors to employer healthcare spending. These findings help explain why overall medical costs can rise even as insurers and employers try to make individual services more affordable. Companies may face large claims from complex illnesses at the same time that routine care, hospital services, and prescription drugs become more expensive.
Healthcare spending also varies between employers depending on the health needs of their workers and the insurance arrangements they maintain. A company with relatively few employees can be especially vulnerable when a small number of expensive claims substantially changes its overall spending. This variation is one reason industrywide forecasts should not be interpreted as exact predictions for every business.
Weight-Loss Medication Coverage Is Becoming a Major Concern
Prescription drugs used for weight management are another focus of employer cost-control efforts. Medications known as GLP-1 drugs have attracted considerable interest because of their use in treating diabetes and their role in helping eligible patients lose weight. Their growing use, along with the cost of covering treatment over time, has prompted employers to reconsider how these medications fit into their benefit plans.
Business Group on Health’s survey reported that employer coverage for GLP-1 medications used for weight loss declined from 72% of surveyed employers in 2025 to 60% in 2026. That figure reflects the particular employer survey discussed in the reporting, rather than a measure of all insurance plans across the country. The findings indicate that some employers are pulling back from coverage even as the medications remain an important consideration for workers who rely on them.
Some Employers Are Exploring Alternatives to Traditional Drug Coverage
Reducing or eliminating insurance coverage is not the only approach employers are considering. Some are examining ways to help workers obtain medications through direct-purchase programs or other arrangements that may cost less than traditional insurance coverage. Depending on the employer’s plan and the arrangement involved, health reimbursement arrangements may also offer a way to help eligible workers cover certain expenses.
These alternatives are not automatically available to every employee, and they do not necessarily provide the same protections as coverage through an insurance plan. Workers who rely on ongoing treatment should therefore check whether their medication remains covered, what eligibility rules apply, and how much they may owe under a revised plan. A change that reduces an employer’s spending can have a very different effect on an employee who needs a prescription regularly.
Lower Premiums Can Come With Higher Out-of-Pocket Costs
One of the most important distinctions during enrollment is the difference between the amount paid for insurance and the amount paid when medical care is needed. A premium is the recurring cost of maintaining coverage, while a deductible generally represents what a person must pay toward eligible care before the plan begins paying under its terms. Copayments, coinsurance, and prescription costs can add to the expense of using a plan.
Employers seeking lower premiums may adjust these features to reduce their overall spending. A plan with a lower monthly contribution can still become expensive for someone who needs specialist visits, diagnostic tests, or ongoing treatment. Workers comparing options should therefore consider both the predictable cost of keeping the policy and the possible expenses that could arise if they become ill or need significant medical care.
Artificial Intelligence May Add to Some Billing Pressures
Medical prices and the volume of care are not the only issues appearing in employers’ cost forecasts. Aon has also identified the use of artificial intelligence by healthcare providers as a possible contributor to higher billed charges in certain circumstances. Tools that support clinical documentation and coding can affect how services are recorded and billed, although this does not establish that artificial intelligence is a principal cause of the overall increase.
That distinction matters because healthcare costs are driven by several overlapping factors rather than a single development. Expensive treatments, increased service use, high-cost claims, and prescription spending all feature in the industry forecasts. Employers are consequently looking at multiple ways to manage expenses rather than relying on one solution to make coverage affordable.
The Forecasts Are Not Final Insurance Rates for Every Worker
Although the various projections point toward another expensive year, their precise figures are not interchangeable. Aon’s 9.5% estimate measures expected employer healthcare cost growth before mitigation efforts, while Marsh’s 8.2% forecast incorporates planned cost-control measures. Business Group on Health projected a median cost trend of 9.2% before plan changes, potentially falling to 8% after those changes.
These estimates are based on different methods and employer groups, so they should be understood as indicators of pressure rather than guarantees about individual policies. The final outcome for a worker will depend on the employer’s plan, the insurer’s costs, the chosen coverage options, and how the company distributes expenses between itself and its employees. Some workers may see higher contributions, while others may encounter changes to deductibles, benefits, or provider networks instead.
ACA Marketplace Customers Face a Separate Set of Challenges
The forecasts for employer-sponsored coverage also need to be distinguished from projections for people who buy insurance through the Affordable Care Act marketplaces. In a separate analysis, KFF found that insurers participating in the ACA marketplaces had proposed a median premium increase of 15% for 2027, based on publicly available filings across all 50 states and Washington, DC. Its analysis of 2027 ACA marketplace premiums examined a different segment of the insurance market.
Those proposed marketplace increases reflect their own cost pressures, including medical spending and changes affecting premium assistance. They should not be added to or directly compared with employer-sponsored cost forecasts as though they measure the same thing. Both markets face affordability concerns, but the specific financial consequences depend on how a person obtains coverage and what assistance or employer contributions apply.
What Employees Should Check Before Choosing a 2027 Plan
Workers approaching open enrollment should look beyond the headline premium increase and examine the full details of the available plans. The monthly cost, deductible, copayments, prescription coverage, provider network, and maximum out-of-pocket limit can all influence how affordable coverage will be over a year. It is also useful to verify that preferred doctors, hospitals, and necessary medications remain covered under the plan being considered.
Employees whose employers change insurance arrangements should pay particular attention to new restrictions or requirements. A plan that looks inexpensive may provide less practical value if it excludes a needed medication, limits access to a preferred provider, or shifts more expenses to the patient when treatment is required. Reviewing those terms before enrollment can help workers understand the potential trade-offs rather than judging a plan by its paycheck deduction alone.
The Bigger Question Is Who Will Absorb the Rising Costs
Employers and workers enter the 2027 enrollment season facing a common problem: the cost of providing healthcare is increasing, but there are limits to how much either side can comfortably absorb. Companies want to preserve competitive benefits while controlling their expenses, and employees need coverage that protects them from large medical bills without overwhelming their household budgets. Those priorities can become difficult to reconcile when premiums and healthcare use continue rising.
The latest forecasts suggest that managing health benefits will remain a significant challenge throughout the next year. The figures do not mean every employee will experience the same increase, nor do they establish the final price of any particular plan. They do show why the choices made during the next enrollment season could matter well beyond a single monthly insurance payment, especially for workers whose wages are already struggling to keep pace with healthcare expenses.
