What health benefits cost in 2026
KFF's 2025 Employer Health Benefits Survey put the average annual premium at $9,325 for single coverage and $26,993 for family coverage. Family premiums rose 6%, the third straight year of 6% or more, faster than wages and inflation. Employers paid most of the cost: workers contributed 16% of the single premium and 26% of the family premium.
Small firms got a worse deal. The average deductible at small firms was $2,631, compared with $1,670 at large firms.
What changed this year
- Individual-market prices jumped. ACA insurers raised premiums about 26% on average after the enhanced premium tax credits expired at the end of 2025. That hits ICHRA allowances directly.
- HSAs expanded. Bronze and catastrophic marketplace plans became HSA-compatible, and direct primary care no longer disqualifies you.
- Level-funding went mainstream. 37% of covered workers at firms with 10–199 workers are in level-funded plans.
Your options
| Option | How it works | Watch out for |
|---|---|---|
| PEO | A co-employer puts you on its pooled master plan | Per-employee fees; renewals of 30–40% once teaser rates end |
| ICHRA | You reimburse employees for individual plans | Average small-employer allowance was $583/month in 2025; 2026 prices rose 26% |
| Fully insured | You buy a carrier's small group plan | High premiums and deductibles; carrier keeps unspent premium |
| Level-funded | Fixed payment funds claims plus stop-loss | Underwriting; renewals follow your claims |
| Prescience | Your own plan with an effective $0 deductible, designed and run by Prescience | Needs a census to quote; plan design set per company |
Each has a deeper comparison: PEO, ICHRA, fully insured and level-funded.
The rules that apply to you
- Under 50 full-time equivalents: you don't have to offer coverage, but most startups do to hire.
- 50 or more: the ACA employer mandate applies; offer affordable, minimum-value coverage or risk penalties.
- 20 or more employees: federal COBRA applies. Many states have their own continuation rules for smaller employers; see health insurance by state.
- Taxes: employer contributions are tax-deductible, and employees can pay their share pre-tax through a Section 125 plan.
How we approach it at Prescience
At Prescience, we design and run your company's health plan, from setup and enrollment to claims, compliance and COBRA. What your team gets:
- An effective $0 deductible, so the plan helps from the first visit.
- Simple copays shown before a visit, capped by a low out-of-pocket maximum.
- A broad national PPO network, plus providers we contract with directly.
- 24/7 physician-led care navigation: a care team that finds the right provider, books appointments and explains costs up front.
What your company gets: one monthly cost set in your quote, usually 10–20% below comparable fully insured coverage and fixed before the plan starts, with no admin fees. You keep your payroll provider, and the plan can start mid-year.
A 2026 checklist
- List headcount, home states and who covers dependents.
- Decide what you'll contribute for employees and dependents.
- Pull your true cost, including PEO or admin fees, not just premiums.
- Get at least two quotes, including one outside your current setup.
- Compare what employees experience: deductible, out-of-pocket maximum, network and support.
- Check how renewals are priced and how hard it is to leave.
See what your team would pay with Prescience
Answer a few questions about your team and get a quote in about 60 seconds, or talk it through with one of our benefits experts.
