Going to provide a little more detail on the employer-provided health insurance market in 2025, based on the Kaiser Family Foundation Survey. Employer-provided health benefits cover the single largest number of Americans. The cost of these benefits is a major component of overall compensation costs for companies and tends to hold down wage growth. The last couple of years have seen another acceleration in underlying health care costs, so health insurance premiums are rising as well. (KFF Survey)
The average health insurance premium for a single person with employer-based coverage is $9325 in 2025, up 5% from the prior year. For a family it is an astounding $26,993, up 6% from 2024. In the last ten years the family premium has risen by 53%. By comparison, general inflation grew 36% in that period and average wages 48.2%. Premium growth has been basically the same for large and small employers. Somewhat surprisingly, premium increases also have been about the same in insured and self-funded plans. Self-funding is generally pitched as a money saver, but apparently it isn’t.
Premiums for single coverage are roughly equivalent for large and small companies. A small company is defined as one with under 200 employees. The family premium is actually somewhat lower at these small firms than larger ones. Premiums are lower in high deductible plans and higher in Preferred Provider Organization plans, which allow greater choice of providers.
For unclear reasons, companies with a high proportion of low-wage workers have lower premiums than do firms with more high-wage employees. Companies with more younger workers tend to have lower premiums. Employers that are for-profit also have lower premiums than do not-for-profit ones. Premiums are highest in the Northeast and lowest in the South. Premiums have a fair amount of variance by a company’s industry segment. Health care companies have the highest premiums and agriculture/mining/construction the lowest. The overall spread of premiums has substantial variance around the average, with about 20% of workers having access to plans with premiums 20% above the average and another 20% or so having access to plans with premiums 20% below the average.
More tomorrow.
