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Open enrollment season begins November 1, and many employees are stunned by price increases in their company-provided health insurance coverage. The sticker shock many workers feel now were already a source of stress for employers, and next year’s hikes are expected to be steeper, according to a healthcare think tank’s latest report. The most recent alert about rising health insurance prices came from KFF, a non-profit organization that monitors the medical sector and healthcare issues. Its 27th annual survey of more than 1,800 businesses with at least 10 employees found premiums for the family plans that most workers opt for rose 6 percent this year, well over twice the 2.7 percent inflation rate during the same period. For employers, that pushed the average annual cost of those plans up to nearly $27,000, with about 23 percent of the outlays — or $6,850 —passed along to covered workers. Those findings were largely in line with results of a September survey by consulting firm Mercer, which pegged the rises at 6.5 percent — but only after business owners adjusted plans to pass on part of the higher costs with covered workers. Mercer also found employers expect an additional 9 percent hike in health plan prices next year, slightly lower than the 10 percent or more KFF respondents anticipated. “Many employers may be bracing for higher costs next year, with insurers requesting double-digit increases in the small-group and individual markets on average, possibly foreshadowing big increases in the large-group markets as well,” the KFF report said. Featured Video An Inc.com Featured Presentation The price differences between plans for small and large companies come down to volume — and leverage. Corporations with big staffs can more easily negotiate lower coverage prices with insurance providers than companies with 200 employees or less, many of which participated in the KFF survey. Consequently, most of those smaller businesses pay higher premiums. That means once small business owners pass along the typical 20 percent to 25 percent of those costs to staff, their employees on average wind up paying $12,000 per year for family plans, or nearly twice the national amount KFF identified. Many other entrepreneur-owned companies are denied coverage entirely, with insurers considering them too small to bother with. When that happens, workers usually turn to plans offered under the Affordable Care Act, which are also expected to rise even higher amid the tax and spending cuts passed in President Donald Trump’s “One Big Beautiful Bill.” As things stand, pretty much all businesses, organizations and individuals seeking health insurance are on the hook for price hikes. Employers told KFF that a big driver of the increases are the surging costs of prescription drugs, especially GLP‑1s medication. That’s now frequently being used for weight loss, and by a far higher number of people than any insurance companies or client businesses expected. But prices for virtually all aspects of healthcare — including insurance itself — have spiked as consolidation across the sector continues, concentrating pricing power as competition declines. That evolution is one reason KFF warned of even bigger shocks to both employers and workers in 2026. “There is a quiet alarm bell going off,” said KFF President and CEO Drew Altman in comments accompanying the survey’s results, in which coverage of semaglutide weight-loss drugs play an increasingly significant role. “With GLP-1s, increases in hospital prices, tariffs and other factors, we expect employer premiums to rise more sharply next year.” But there’s another reason for Altman’s alert. While businesses have managed to make changes in the past to negotiate limited increases from insurers — and shift some higher costs to employees — their margin for maneuver has now significantly narrowed. That’s especially true when it comes to skyrocketing prescription drug prices, which are almost entirely out of their control. As a result, many employers may have no other option than to require their staff to shoulder more of their health insurance costs, or simply stop including many expensive drugs and treatments that are pushing expenses up. “Employers have nothing new in their arsenal that can address most of the drivers of their cost increases,” Altman warned. “(T)hat could well result in an increase in deductibles and other forms of employee cost sharing again, a strategy that neither employers nor employees like but companies resort to in a pinch to hold down premium increases.”
