October 26th, 2026 – KFF just released its annual Employer Health Benefits Survey, the most widely cited benchmark for what employers and workers pay for job-based health insurance. This year’s survey drew on responses from 1,937 employers with 10 or more workers, collected between January and July 2026.
The survey showed that premiums rose faster than paychecks again, workers are paying more out of pocket, and small businesses are carrying a heavier share of the load than large companies. Here’s what the numbers show and what they mean if you own or run a business in Colorado.
The headline numbers
- The average annual premium for family coverage is $28,303, up 5% from 2025.
- The average annual premium for single coverage is $9,804, also up 5%.
- Workers contribute an average of $7,471 per year toward family coverage, up $621 (about 9%) from $6,850 last year.
- Workers contribute an average of $1,672 per year toward single coverage.
- The average deductible for single coverage is $1,955.
Premiums are still outpacing paychecks
In 2026, family premiums rose 5%, while workers’ earnings rose 3.7% and overall inflation was 2.7%.
Over the last five years, family premiums are up 28%, compared with 26.9% for workers’ earnings and 24.4% for inflation. Looking back further, the average family premium was $15,220 in 2011, which means it has risen about 86% over 15 years.
For an employer, that gap shows up every year at renewal. For employees, it shows up in their paycheck deductions and in what they pay when they actually use their coverage.
Small businesses carry a heavier share
KFF defines small firms as those with 10 to 199 workers. Premiums at small firms are actually a little lower than at large firms ($27,288 vs. $28,592 for family coverage), but the way the cost is split is very different.
- Family contribution: Workers at small firms pay an average of $9,687 a year toward family coverage, compared with $6,840 at large firms.
- Share of the family premium: Small-firm workers pay 37% of the family premium on average, compared with 25% at large firms.
- Deductibles: The average single deductible is $2,624 at small firms vs. $1,772 at large firms.
- High deductibles: 55% of covered workers at small firms have a single deductible of $2,000 or more, compared with 33% at large firms. At the $3,000 level, it’s 37% vs. 18%.
There’s an important bright spot, though. 29% of covered workers at small firms have an employer that pays the entire single premium, compared with just 5% at large firms. Many small business owners are clearly working hard to take care of their people, often by paying 100% of the employee’s own coverage and asking the employee to share more of the cost for dependents.
Offering benefits is a real competitive advantage
According to KFF, 67% of firms with 10 or more workers offer health benefits in 2026, up from 61% last year.
At the same time, the share of small-firm workers who work for an employer that offers benefits has fallen over the long term, from 90% in 2000 to 76% in 2026. In other words, roughly one in four people working at a business with 10 to 199 employees doesn’t have access to coverage through their job. If you’re competing for good employees, a well-designed benefits package still sets you apart.
How employers are responding to rising costs
KFF asked large employers (200 or more workers) how they’re responding to projected cost increases:
- 44% increased the share of the premium employees contribute
- 21% raised deductibles or other cost sharing for most services
- 16% changed insurers or plan administrators
- 14% raised cost sharing for selected services
- 10% added plan management such as prior authorization
- 7% moved to a tiered or narrower network
Smaller employers are also looking beyond traditional fully insured plans:
- Level funded plans: 38% of covered workers at small firms are now in a level funded plan, similar to 2025. A level funded plan is a self-funded arrangement with a fixed monthly payment and stop-loss protection, built for smaller groups. KFF notes these plans may use health status in rating and underwriting, so they tend to work best for groups with healthier claims experience.
- Funding individual coverage: Among small firms that don’t offer a group plan, 11% provide funds for employees to buy their own individual coverage, typically through an Individual Coverage Health Reimbursement Arrangement (ICHRA) or a Qualified Small Employer HRA (QSEHRA). Both let an employer reimburse employees tax free for individual health insurance premiums.
What this means in Colorado for 2027
The national outlook isn’t any lighter. KFF reports that forecasts heading into 2027 are again projecting premium increases approaching double digits.
Here in Colorado, the Colorado Division of Insurance announced on September 22, 2026 that fully insured small group premiums are expected to rise an average of 14% for 2027, with averages ranging from about 9.9% to 15.2% depending on the rating area. If your renewal arrives with an increase in that range, it’s in line with what’s happening across the state, though every group’s renewal is different.
The bottom line
Health benefits keep getting more expensive, and small employers feel it more than anyone. The good news is that you have more options than you may realize. Depending on your group’s size, location, and claims experience, a fully insured small group plan, a level funded plan, a PEO, or an ICHRA may each make sense, and the right answer can change from one year to the next.
The key is comparing those options side by side before you renew, with an honest look at what each one means for both the business and your employees’ out-of-pocket costs. Level funded plans may return a portion of unused claims funds at year end, depending on the carrier’s terms. A PEO can often give a small business access to plan designs and rates it couldn’t get on its own in the Colorado small group market. Fully insured plans offer stable, regulated pricing.
At Colorado Health Insurance Brokers, we’ve been helping Colorado employers sort through these choices since 2003, and our services are free to you. If your 2027 renewal has you rethinking your benefits, we’d be glad to walk you through your options. Let us help you go over your company’s plan options.
Sources
- KFF: 2026 Employer Health Benefits Survey
- KFF: Premiums and Worker Contributions Among Workers Covered by Employer-Sponsored Coverage, 1999-2026
- KFF, 2026 Employer Health Benefits Survey Chart Pack (October 22, 2026)
- Colorado Division of Insurance: Final ACA Health Insurance Premium Increases for Plan Year 2027