U.S. health insurance premiums for employer-based plans are expected to rise sharply next year, continuing a troubling trend that began before the pandemic. The average annual premium for a family of four exceeded $25,500 in 2024, with employers covering $19,200 and employees paying about $6,300. Since 2019, total premiums have surged by over 24%, and industry analysts forecast even higher increases in 2026.
Why Healthcare Costs Are Rising
Several factors contribute to the growing cost of health insurance. For-profit sectors—including pharmaceutical companies, pharmacy benefit managers, hospitals, and insurers—play a significant role in driving prices higher. New, effective but costly medications such as GLP-1 weight loss drugs and advanced cancer treatments add to expenses.
Additionally, the pandemic delayed many routine and preventive care visits, increasing demand as patients return to healthcare providers, further pushing costs upward. Industry consolidation among insurers and providers has reduced competition, allowing price increases to proliferate.
Employers’ Role in Absorbing Costs
Employer-sponsored health insurance covers approximately 154 million Americans. Many workers can expect their personal contributions to rise by 6% to 7% in 2026. Although employers have limited control over rising healthcare costs, they determine how much of those costs employees bear.
Some companies, however, absorb the full premium costs themselves. Boston Consulting Group (BCG), for example, covers 100% of health insurance premiums for about 10,000 U.S. employees and their families—roughly 20,000 individuals in total. Alicia Pittman, BCG’s Chief People Officer, highlights that investing in employee health supports productivity and retention, making zero-premium plans a strategic business decision.
Smaller Employers and Startups Offering Zero-Premium Plans
While large companies like BCG lead the way, about 12% of large employers nationwide offer at least one medical plan with zero upfront costs for employees, according to Mercer. However, only 2% extend this benefit to dependents.
Some nonprofits and startups also provide zero-premium health insurance. Zocdoc, an online scheduling platform, offers multiple plans including a zero-premium option with higher deductibles partially offset by health savings account contributions.
Chicago-based startup Bartesian covers all medical, dental, and vision premiums for its 30 employees and their families. Founder Ryan Close, inspired by his Canadian background, views this as a core value of his company, even as healthcare costs rise. Although other benefits like parental leave are limited, the zero-premium policy helps attract and retain talent by reducing employees’ financial burdens.
Balancing Costs and Benefits for Employers and Employees
Health insurance costs extend beyond premiums; deductibles and copays add to employees’ financial responsibilities. Nonetheless, the trend among some employers to absorb premium costs reflects broader efforts to prioritize worker health and satisfaction amid rising healthcare expenses.
By offering zero-premium plans, companies aim to reduce employee financial stress, improve workforce stability, and maintain competitiveness in a challenging labor market. While these measures do not fully solve systemic healthcare inflation, they offer a partial buffer for workers facing soaring medical costs.
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