Family health insurance premiums have climbed to nearly $27,000 — what’s driving the high costs?

The average annual premium for employer-provided US health insurance prices rose by 6% last year, hitting $26,993 in 2025, according to a new analysis from KFF, a nonprofit focused on health policy. In contrast, workers’ wages increased by 4% and inflation by 2.7%.

And it’s unlikely to get why insurance is expensive: New data from Mercer, a benefits consulting firm, indicates that the cost of employer-sponsored health coverage could rise again this year by the most since 2010.

The increases are a squeeze for employers and their staff members, with average annual premiums for family health insurance cost 2025 $27,000 and many workers contributing part of their paychecks to payroll deductions. “It’s like buying a car every year just to cover a family of four,” said Matthew Rae, associate director of KFF’s health care marketplace program.

As Washington d.C. turns its attention to the ACA’s federal and state marketplaces and a possible elimination of subsidies for people who buy plans through them, the vast majority of Americans who obtain health insurance through their jobs have been somewhat overlooked in the political conversation.

More than 24 million Americans currently receive coverage through ACA’s federal and state marketplaces. The far larger group that includes working-age adults and their families, roughly 154 million people, relies on employer-based health plans. These work-based health insurance arrangements remain the backbone of the nation’s health insurance system.

KFF’s insurance market analysis, which is based on a survey of 1,862 non-federal public and private employers, sheds light on how both employers and workers contribute to these costs. In 2025, the average worker’s cost for family medical insurance premiums 2025 reached $6,850, while employers covered $20,143 of the cost of a family health plan.