Same Old Story: Health Insurance Premiums Up 6% in 2025

The KFF Employer Health Benefits Survey for 2025 is out today. The survey finds that family premiums for employer provided health insurance coverage rose 6% in 2025, similar to increases in both 2023 and 2024.

For now, employers (on average) continue to pay most of the cost of those premiums. So, as in previous years, employers absorbed most of the increase in premiums.

Among firms with at least 200 workers, 36% said that prescription drug prices were the biggest factor contributing to higher premiums in recent years. Specifically, pricey GLP-1 weight loss drugs were cited as a factor in higher premiums. Other contributors included treatments for chronic diseases and rising hospital prices.

Change may be on the horizon, however. As a Wall Street Journal article about this year’s survey notes, many smaller employers who have for years provided health insurance coverage to employees are being forced to reconsider whether they can continue to pay ever rising costs for health insurance. Many employers are being forced to decide between absorbing rising health insurance premiums and increasing wages.

Employers and employees alike are frustrated by the never-ending increases in healthcare costs. But regardless of how a particular employer decides to navigate this challenge, proactively communicating an organization’s total rewards approach is critical. While employees are understandably unhappy when they see increased deductions for their health insurance, employers can cushion the blow by being transparent about the organization’s overall spend on health benefits and – more important – explaining how those benefits contribute to an overall total rewards strategy.

Employees who understand their total rewards demonstrate greater loyalty and display higher levels of motivation and engagement. To learn more about how RewardsFocus can help you maximize the return on your organization’s total rewards investment, contact us today.