Health-Care Costs Soar for Workers, Companies

The average cost of a family health-care plan is now more than $28,000 annually, rising 5% over the past year, according to the latest annual benchmark health benefits survey from the nonprofit Kaiser Family Foundation (Axios and The Wall Street Journal, subscription).

What’s going on: “Corporations and workers are sharing the pain as health cost increases are projected to hit their highest levels in decades,” Axios reports, adding that “workplace insurance remains a linchpin of the health system, covering almost 157 million people under age 65.”

• Workers on average contribute $7,471 toward their health-care premiums, an increase of 9% from 2025.
• Workers at smaller firms (under 200 employees) pay more: an average of $9,687 toward family coverage.
• Health-care costs are rising faster than other parts of the economy, as wages rose only 3.7% and general inflation rose 2.7%.

Employers are adapting to better manage drug benefits: Nearly all (98%) workers receive prescription drug coverage in their employer health plan.

• As transparency progresses, roughly half of large firms say that they get sufficient information about rebates and other discounts paid by drug manufacturers to their insurer, administrator or pharmacy benefit manager. And two-thirds say that they get sufficient information about drug utilization.
• A third of employers with at least 50 workers offer enrollees access to lower-cost mail-order generic drugs through venders such as GoodRx, Single-Care or Mark Cuban Cost Plus Drugs.
• Roughly one in five large firms cover GLP-1 drugs specifically for weight loss, and some require a lifestyle management program for utilization.

Why it’s important: While employer-sponsored health care remains the backbone of coverage for nearly 157 million Americans, projected cost increases in 2027 and widening disparities for small businesses threaten both employer competitiveness and worker financial security.

• Because premium growth is now significantly outpacing both general inflation and wage gains, businesses face tougher trade-offs between absorbing medical costs and investing in workforce expansion, wage increases or capital investments.
• About 90% of manufacturing employees receive health coverage through their employer, making business-led strategy and legislative reform essential to curbing runaway medical expenditures, pursuing PBM reform and improving coverage options for employers.

The impact on manufacturers: Rising health-care costs are taking a toll on manufacturers. In the NAM’s Q3 Manufacturers’ Outlook Survey, 72% of respondents cited rising health-care costs as a top business challenge.

The bottom line: “Policymakers must act to reduce health-care costs and protect manufacturers’ ability to offer vital health-care benefits,” said NAM Vice President for Domestic Policy Jake Kuhns. “Ensuring the American people can access affordable health care and life-changing innovations will sustain employer-sponsored coverage, strengthen domestic manufacturing and support a healthier, more competitive American workforce and economy.”

Further reading: Learn more about NAM’s policy agenda to address these challenges faced by employers.