Small-business workers pay more as employer health premiums climb

KFF survey finds worker family premium contributions rose 9% to $7,471

Workers who rely on employer-sponsored health insurance paid more toward their premiums in 2026, and employees at small businesses absorbed the sharpest increases. The 2026 Employer Health Benefits Survey, released Thursday by the health care research nonprofit KFF, found that employers report covered workers contributed an average of $7,471 annually toward premiums for family health benefits this year, up roughly 9%, or $621, from last year.

“Workers are paying a bigger chunk this year,” said Matthew Rae, associate director of KFF’s Program on the Health Care Marketplace, “which also brings up the issue of affordability.”

Nearly 157 million Americans under retirement age rely on employer-sponsored health coverage, according to the KFF study, which found the increase was most pronounced at small businesses made up of 10 to 99 workers — employees who typically shoulder a larger share of their insurance costs than those at bigger companies.

Covered workers at firms with 10 to 99 employees contributed an average of $9,687 toward family coverage in 2026, compared with $6,840 at firms with 200 or more workers. In 2025, those figures were roughly $8,900 and about $6,200, the report said.

The gap is also visible in how each premium is split. Covered workers at smaller firms contribute an average of 37% of the premium for family coverage, compared with 25% at larger firms. And 32% of covered workers at small firms are enrolled in plans in which they must pay more than half the family premium, compared with just 6% at larger companies.

Rising costs have left small businesses and their employers especially squeezed, requiring them to balance attractive employee benefits against other increasingly costly expenses.

The Small Business Administration says small businesses employ roughly 62.3 million people, or 45.9% of private-sector workers. Rae said small firms face higher deductibles than larger companies and more volatility in the market.

Jenna Caligaris, who manages an upstate New York contractor with roughly 25 workers, said the pressures of providing health insurance to her workers keep her up at night.

Caligaris said her firm operates in a field that is extremely competitive for workers, so the company looks for any way to keep employees from taking on more insurance cost-sharing. Caligaris said the company provides 80% of coverage to its nonunion workers, with employees covering the rest. Caligaris said the firm has stretched the lifespan of company vehicles and tools, cut the size of workers’ year-end bonuses and ended the annual company picnic to hold costs down: “we’re trying to maintain coverage and stay competitive — so we’ll have to eat these price increases,” she said.

In the past three years, the company has switched insurers to save on costs, yet is getting hit this year by a 25% increase in premiums, Caligaris said.

The findings arrive as rising health care costs have emerged as an important issue for voters in the midterm elections. An AP-NORC poll conducted in October found that about 7 in 10 registered voters call health care “one of the most important issues” in this election.

President Donald Trump has tried to make health care affordability part of his midterms pitch, saying that his most-favored nation prescription drug pricing would reduce costs and promising rebates for some Americans. Other steps taken by Trump’s Republican administration have raised costs for some, the Associated Press reported, while the survey indicates that many workers are seeing their health insurance expenses climb without clear improvements in benefits.

KFF’s annual health benefits survey of large and small employers includes roughly 1,900 employers with 10 or more workers. Associated Press reporter Josh Boak contributed to this report.