Companies’ premiums for employees’ family health insurance increased at more than double the US inflation rate to over $25,000 in 2024 as costs of care rose, according to a study. 

The average employer-sponsored health insurance premium for families jumped 7% to $25,572 this year, nonprofit health researcher KFF said Wednesday, compared with the overall US inflation rate of 3.2%. The 2024 increase matches the growth rate from the previous year, following a pandemic lull. Costs for nearly 154 million people in the US who get coverage through their employers normally rise each year, but the growth this year weighs particularly on employers amid rising prices for other goods and services. While overall inflation appears to be slowing, it can take time for those trends to show up in health insurance premiums, according to the survey of more than 2,100 companies.  

“Health-care prices are often set in advance, and there is a lag in how long it takes higher prices to filter through to premiums,” said Matthew Rae, associate director of KFF’s Health Care Marketplace Program and a co-author of the annual survey. “While inflation is lower this year, the growth in premiums we are seeing may still be reflecting the higher prices we saw in 2022 and 2023.”

Weight-Loss Drugs

Companies are increasingly aware of workers’ desire for coverage of new weight-loss drugs from Eli Lilly & Co. and Novo Nordisk A/S. About 44% of all large employers said that covering the drugs will be important or very important to employee satisfaction, the survey reported. However, only about one in five employers with at least 200 workers that offer health benefits said they now cover such drugs for weight loss.

The drugs’ cost roughly $1,000 a month, weighing on premiums. A third of large companies offering the therapies said they will have a significant impact on prescription drug spending. About two-thirds of employers said they’re not likely to begin covering the medications in the next 12 months.   “I think what we’re seeing is that employers are still figuring it out and that at least this year,” coverage of the drugs will be relatively modest, Rae said. Lightening the Burden Workers contribute an average of $6,296 a year for family coverage, about a quarter of annual premiums, according to KFF’s survey. That hasn’t risen as much as premiums have: Over the past five years, the amount families contribute has only gone up 5%. “In the last couple years we’ve seen sort of such a tight job market that employers have been reticent to do things that make their coverage less attractive,” Rae said. “If you’re an employer and you’re trying to recruit, retain the best employees, then this is a really important part of your compensation strategy.” Some of the largest employers in the US are trying to reduce the burden of rising health-care costs on lower-wage workers, the survey reported. About 29% of these larger firms say they have programs to reduce lower-wage workers’ premiums, and 19% said they offer limited plans with more affordable coverage.

Key findings from the survey were published in the journal Health Affairs.