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Employer Health Costs Skyrocket, Outpacing Wages
22 Oct
Summary
- Family health plans cost an average of $28,303 annually.
- Employee contributions rose 9% to $7,471, outpacing wage growth.
- Coverage for weight-loss GLP-1 drugs has significantly decreased.
The average cost of employer-provided family health insurance has reached $28,303 per year, marking a 5% increase. Employees are now contributing an average of $7,471 towards these plans, a 9% jump that significantly outpaces the 3.7% average wage growth over the past year. This escalating expense is forcing companies to explore cost-saving measures.
One notable trend is the reduction in coverage for GLP-1 weight-loss medications. In 2026, only 33% of large employers cover these drugs for obesity, down from 43% a year prior. Many firms cite these drugs as significantly increasing prescription drug spending. Smaller employers are even less likely to offer this coverage.
Several factors are contributing to rising healthcare expenses. The No Surprises Act, intended to curb costs, has reportedly led to an estimated $22.4 billion in additional expenses. Higher spending on behavioral health services and hospital care are also cited, with artificial intelligence in billing potentially adding further costs. Projections suggest cost increases could approach double-digit rates by 2027.
