Every open enrollment, employers and employees go through a familiar exercise. HR teams work with their brokers to negotiate next year's benefits, finance tries to make the numbers work, and employees open their enrollment materials hoping their health insurance won't cost them even more next year. Then everyone makes a few difficult decisions, crosses their fingers, and does it all again next year.
KFF's 2026 Employer Health Benefits Survey highlights why these decisions are becoming increasingly painful for employers and employees alike. The average annual family health insurance premium reached $28,303 this year, up 5% from 2025. Employees are contributing an average of $7,471 toward that coverage, a 9% increase in a single year. Meanwhile, wages grew just 3.7%.
In September, I wrote about the rising healthcare costs employers are anticipating in 2027. KFF's latest findings show that employees are already feeling the financial strain. One area I think deserves more attention is how our employer-sponsored health insurance system accounts for families, especially when both spouses work and have access to coverage through their respective employers.
Employers are running out of ways to manage rising costs
Employee benefits can feel like a never-ending game of tug-of-war. Employers want to offer competitive health coverage while keeping costs manageable, and employees want affordable coverage that meets their families' healthcare needs. According to KFF, 44% of large employers reported increasing the share of premiums paid by workers in response to projected health plan cost increases in 2026. Among employers with 5,000 or more workers, that figure reached 66%. Another 21% of large employers increased deductibles or other cost sharing for most services, while 16% changed insurers or plan administrators. I understand why employers are making these decisions. When healthcare costs keep climbing, there are only so many ways to absorb the increases before some of that expense gets passed along to employees.
For employees, the consequences are significant. At smaller employers, workers contribute an average of $9,687 annually toward family coverage, compared with $6,840 at larger companies. KFF also found that 13% of covered workers are enrolled in plans where the required contribution for family coverage is $12,000 or more. At smaller companies, that figure reaches 31%. For a family choosing that coverage, that's at least $1,000 a month in premiums before paying for a doctor's visit, prescription, or deductible.
The $28,303 question for dual-income families
I've always been curious about why our health insurance system is structured so differently from the way we approach other major financial decisions. When a married couple applies for a mortgage, the bank considers both incomes. When they buy auto insurance, they can often combine their coverage. Yet employer-sponsored health insurance is largely organized around the individual employee, even when the decision affects an entire household.
Employer-sponsored coverage is generally organized around the individual employee and the plans available through their company. For families where both spouses work, that can mean navigating two completely different sets of health benefits. One spouse reviews the plans available through their employer, while the other does the same, sometimes several months later. Then they're left to figure out which combination of coverage makes the most sense for their family. It's a complicated decision, and I can understand why many families might stick with the coverage they already know rather than risk making an expensive mistake.
Consider what employers are spending. According to KFF, employers contribute an average of roughly $20,832 annually toward family health insurance premiums. For companies with thousands of employees, helping even a relatively small number of families find a less expensive coverage arrangement could make a meaningful difference.
Of course, switching to a spouse's health plan only makes sense if it meets the family's healthcare needs and is financially worthwhile. But what if employers could reimburse families for eligible healthcare expenses incurred on a spouse's plan while also reducing the cost of providing health benefits to their employees?
Employers have another option for spousal coverage
According to KFF, 24% of firms offering spousal coverage either restrict eligibility or require a surcharge when a spouse has access to health insurance elsewhere. Among large employers, that figure has increased from 22% in 2022 to 29% in 2026.
Disney recently announced that spouses and domestic partners with access to their own employer's coverage will no longer be eligible for Disney's medical plans starting in 2027. It's a decision I've written about before because it illustrates the difficult position employers are in. Companies with generous benefits can end up paying substantial amounts to cover spouses who have insurance available through their own employers. Restricting that coverage can reduce spending, but it also creates new financial considerations for employees and their families.
What surprised me in KFF's survey is that only 8% of firms offering health benefits provide additional compensation or benefits to employees who enroll in a spouse's health plan. Giving employees a financial incentive to consider coverage through a spouse, by reimbursing eligible healthcare expenses, could help families save money while giving employers another way to manage their healthcare spending.
We built Healia to make this possible. Our Total Care Option (TCO) is a spousal Health Reimbursement Arrangement (HRA) that reimburses eligible healthcare expenses when an employee and their family enroll in qualifying coverage through a spouse's employer. Depending on the benefit design, the TCO can reimburse up to 100% of eligible deductibles, copays, and coinsurance.
Here's how that works for employers. When an employee and their family move to qualifying coverage through a spouse, the employer can reduce the costs associated with covering that household under its own health plan. Instead, it funds a defined reimbursement benefit that pays eligible expenses employees incur and submit, up to the plan's limit. The amount and timing of employer savings depend on the health plan's funding arrangement and benefit design. For employees, those reimbursements can help offset the additional expenses associated with moving to their spouse's coverage.
Employers can offer the TCO with or without a spousal surcharge or carve-out, depending on their benefits strategy. The important part is giving families a reason to evaluate their choices and enough information to make a good decision.
Open enrollment should account for the whole household
With open enrollment now underway for the vast majority of our clients, the questions we're hearing from employees reinforce just how complicated these decisions can be. What happens if their spouse's open enrollment doesn't begin for several more months? Will switching to their spouse's plan affect other benefits they receive from their employer? Can they continue contributing to a Health Savings Account if they enroll in a spousal HRA?
For HR teams, there's still time to help employees think through their choices during this open enrollment. Remind employees to consider coverage through a working spouse, and make it easier for spouses to participate in the process. For brokers and employers planning future renewals, it's worth examining how spousal coverage fits into the overall benefits strategy.
When I founded Healia, I wanted to make employer-sponsored healthcare work better for the families and companies paying for it. I believe that starts with recognizing that healthcare decisions are often household decisions, even when the insurance is provided through an individual employer. Helping families compare the plans available to them, while giving employers a way to support them financially, can make a meaningful difference for both.
If you're interested in exploring what a spousal HRA could mean for your clients or employees, let's talk.