Employers are looking for ways to soften health price shocks
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Employers grappling with family insurance costs that rival the price of a new sedan are increasingly setting up onsite clinics and negotiating directly with health systems to better control their medical spending, according to a new KFF survey of workplace coverage.
- What they aren't doing, for the moment, is saddling workers with a disproportionate share of rising health expenses.
The big picture: Corporations and workers are sharing the pain as health cost increases are projected to hit their highest levels in decades. And workplace insurance remains a linchpin of the health system, covering almost 157 million people under age 65.
- Despite employer efforts, millions of Americans already gripped by affordability concerns will face higher deductibles and copays, along with restrictions like pretreatment reviews.
By the numbers: Workers are paying an average of $7,471 this year for family coverage, up 9% from 2025, per KFF's annual survey of more than 1,900 employers.
- Those at firms with fewer than 200 employees are paying an average $9,687 — or $2,847 more than their counterparts at larger companies.
- Total annual premiums for covering a family including the employers' share now average $28,303, up 5% from 2025.
- The average deductible for single coverage is $1,955, compared with $1,886 in 2025.
Yes, but: Premiums have been rising at about the same rate as general inflation and wages over the past five years.
- The average percentage of the premium paid by a worker for family coverage this year is 27%, about the same as in 1999.
- The question is how employers will respond to further increases in drug and hospital spending, more chronic diseases and generally higher demand for health services.
More firms are setting up clinics staffed by clinicians where workers can get care for work-related and other illnesses. The KFF survey found 24% of surveyed firms now have a clinic onsite or nearby.
- Large employers are also increasingly contracting directly with hospitals or health systems to provide care outside of their health plan's network. KFF found the percentage of large firms with such arrangements doubled between 2019 and 2025.
- And employers are varying copays based on the cost and quality of the health providers, to steer workers to those that are more affordable or deliver better outcomes.
- They're bypassing their insurers and pharmacy benefit managers to help workers find lower-cost drugs through third parties like Mark Cuban Cost Plus or GoodRx. KFF found about a third of employers offer workers access to lower-cost mail-order generic drugs.
- They're also looking at giving workers money to access direct-to-consumer programs offering lower-cost GLP-1 drugs.
What we're watching: The remarkably stable labor market continues to give employers reason to insulate workers from some of the worst health price shocks.
- They could still dump more health costs on workers if the labor market softens and there are fewer incentives needed to recruit and retain.
