The Kaiser Family Foundation (KFF) 2025 Employer Health Benefits Survey offers a comprehensive look at the current landscape of employer-sponsored health insurance, which covers over 154 million Americans under age 65. As rising costs and new trends continue to reshape employee health plans, understanding these changes is essential for employers looking to manage benefits effectively.
At SandStone Insurance Partners, our team of experts helps organizations design forward-thinking Employee Benefits strategies that protect both budgets and employees. Here’s what employers need to know from this year’s findings.
Premiums Continue to Climb
In 2025, the average annual premium for single coverage rose to $9,325, while family coverage reached $26,993—a 5% and 6% increase, respectively, over the previous year. Though this growth was slightly slower than in 2024, it still outpaced both wage growth (4%) and inflation (2.7%).
High-deductible health plans with savings options (HDHP/SOs) remained the most cost-efficient option, averaging $8,620 for single coverage and $25,379 for family coverage. Meanwhile, traditional PPO plans continued to lead in popularity, with higher average premiums of $9,818 and $28,272.
Employees Are Bearing More Costs
Workers now contribute 16% of premiums for single coverage and 26% for family coverage, averaging $1,440 and $6,850 annually. Deductibles also continue to rise, with the average for single coverage now at $1,886, which is a 17% increase in the past five years and 43% over the last decade.
Self-Funding Remains Strong Among Employers
Self-funded health plans continue to dominate, especially among larger organizations. In 2025, 67% of covered workers were enrolled in self-funded plans, with 27% at small firms and 80% at large firms. Smaller companies are also adopting level-funded arrangements, with 37% of covered employees in small firms participating in these hybrid models.
Employers pursuing self-funded or level-funded options benefit from greater cost control, plan flexibility, and the ability to customize benefits to workforce needs. SandStone helps businesses evaluate these models through our tailored Group Health Insurance consulting services.
Chronic Conditions and GLP-1 Drugs Drive Cost Increases
As chronic diseases continue to rise across the U.S., 90% of national health spending now goes toward individuals with chronic or mental health conditions. These long-term health challenges are a key factor in escalating premiums.
Another emerging trend is the surge in demand for GLP-1 medications for weight loss and Type 2 diabetes. In 2025, 43% of large employers (5,000+ workers) covered GLP-1s for weight loss—up from 28% in 2024. While effective, these treatments have significantly increased employers’ prescription drug spending, creating new budgeting challenges for plan sponsors.
Wellness and Prevention Programs Remain Vital
More employers are investing in wellness initiatives to manage risk and encourage healthier lifestyles.
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53% of large firms now offer health risk assessments, often with participation incentives.
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43% of large employers provide biometric screenings, a rise from prior years.
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83% of large organizations offer at least one wellness promotion program, such as smoking cessation or behavioral coaching.
These initiatives not only help reduce long-term costs but also demonstrate an employer’s commitment to employee well-being, which is an increasingly important factor in retention and recruitment.
Key Takeaways for Employers
Healthcare costs are expected to rise another 6.5% to 10% in 2026, according to current projections. Employers that take proactive steps now, such as re-evaluating contribution strategies, exploring level-funded plans, and implementing preventive wellness programs, will be better positioned to balance cost and care.
Partner with SandStone Insurance Partners
As a UBA Partner Firm and industry leader, SandStone Insurance Partners provides strategic guidance to employers navigating today’s complex health care landscape. Our experienced team delivers customized, data-driven Group Benefits solutions that align with your organization’s goals and budget. Contact us today for a consultation.
