KFF released its 2025 Employer Health Benefits Survey on October 22. It's the most widely cited annual benchmark of employer coverage, and it lands right in the middle of renewal season. Here's what the findings say and how to use them with clients.
One methodology note first: the 2025 survey sample was limited to firms with 10 or more employees, so some figures (especially offer rates) aren't directly comparable with estimates published in earlier years.
Premiums: steady growth, now near $27,000 for family coverage
- Average annual family premium: $26,993, up 6% from 2024
- Average annual single premium: $9,325, up 5%
- Average worker contribution for family coverage: $6,850
KFF notes that family premiums have risen 26% over the last five years, roughly in line with inflation and wage growth over the same period. Small-firm and large-firm single premiums are similar ($9,211 vs. $9,361), but family premiums are lower at firms with 10 to 199 workers ($26,054) than at larger firms ($27,280).
How to use it: Benchmarking a client's renewal against national averages helps frame the conversation, but regional and industry differences are large. Use the KFF numbers as context, not as a target.
2026 looks more expensive
KFF's discussion section says early reports suggest cost trends will be higher for 2026. That matches Mercer's preliminary survey results, released September 4, which projected total health benefit cost per employee to rise 6.5% in 2026, the highest increase in 15 years, even after the changes employers planned to make. Without those changes, Mercer said the average increase would have been nearly 9%.
How to use it: If a client's 2026 renewal is in the high single digits, they aren't alone. If it's well above that, it's worth understanding why: claims experience, demographics, network, or pharmacy.
Deductibles are much higher at small firms
- The average single deductible among covered workers with a general annual deductible is $1,886.
- At firms with 10 to 199 workers, it's $2,631, compared with $1,670 at larger firms.
- 53% of covered workers at small firms are in a plan with a single deductible of $2,000 or more, compared with 28% at larger firms.
How to use it: Small employers often feel stuck choosing between higher premiums and higher deductibles. That's a natural opening to show alternatives, including level-funded options or an ICHRA scenario.
Level funding is now mainstream in the small group market
KFF found that 37% of covered workers at firms with 10 to 199 workers are in a level-funded plan, similar to 2024. Overall, 27% of covered workers at small firms and 80% at larger firms are in self-funded plans.
KFF points out that level-funded plans can affect competition in the small group market because, unlike insured plans, they use health status in rating and underwriting and don't have to cover all of the essential health benefits required of insured small-group plans.
How to use it: For healthier groups, level funding can be a strong option. For groups with high-cost claimants, an ACA-rated fully insured plan or an ICHRA may be more stable. Present the trade-offs, including what happens at renewal after a bad claims year.
Plan types
PPOs remain the most common plan type (46% of covered workers), followed by high-deductible plans with a savings option (33%), HMOs (12%), and POS plans (9%).
GLP-1 coverage for weight loss: rising, and expensive
Among firms with 200 or more workers that offer health benefits, coverage of GLP-1 drugs primarily for weight loss was:
- 16% of firms with 200 to 999 workers
- 30% of firms with 1,000 to 4,999 workers
- 43% of firms with 5,000 or more workers, up from 28% in 2024
Among the largest firms that cover them, 59% said use was higher than expected, and 66% said coverage had a "significant" impact on prescription drug spending. KFF also notes that some employers have stopped covering these drugs for weight loss.
How to use it: Expect pharmacy to be a big part of 2026 renewal conversations, even for smaller clients. Ask carriers and PBMs for utilization data and the cost of current GLP-1 coverage terms before deciding.
ICHRA: small numbers, real interest
KFF found that in 2025, 4% of firms that offer health benefits and 9% of firms that don't offer health benefits provided funds to one or more employees to buy individual market coverage, which is the role an ICHRA plays.
Looking ahead, among firms with 10 to 199 workers that don't offer health benefits, 2% said they were "very likely" and another 16% "somewhat likely" to offer an ICHRA to at least some employees in the next two years. Among offering firms, 2% were very likely and 6% somewhat likely.
How to use it: Non-offering small employers are the most open to ICHRA. If you have prospects who have never offered coverage, a fixed-dollar ICHRA can be an easier first step than a group plan.
Offer rates
Sixty-one percent of firms with 10 or more workers offer health benefits to at least some workers. Firms with 200 or more workers are much more likely to offer coverage than smaller firms (97% vs. 59%). Put another way, about four in ten small employers in the survey don't offer health benefits at all. That's a large, underserved market.
The takeaway
The 2025 KFF survey describes a market where premiums keep rising, small employers carry higher deductibles, level funding has become common, and pharmacy costs are a growing concern. Brokers who walk into renewal meetings with this context, and with a range of options beyond the incumbent's renewal, are in a better position to help clients make decisions they can sustain.