Guide to employee health benefits in 2026

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.

Among covered workers with a general annual single deductible, KFF reports $2,631 at firms with 10–199 workers and $1,670 at firms with 200 or more. That is a cost-sharing comparison, not proof that every small-company policy is worse. The 2025 survey excludes firms with fewer than ten workers.

Premiums are about the same size. What differs is who carries the cost: small-firm employees pay more from each paycheck and face bigger deductibles. KFF found 28% of covered workers at small firms pay $12,000 or more a year toward family coverage. Ask employees which contribution and coverage differences matter to them.

What changed this year

• Price the local individual market. For an ICHRA proposal, use actual plan-year premiums by age, location and family size. A national forecast is not a quote and should not automatically be applied to every employee.
• Check actual cost sharing. Deductibles vary by plan and metal level. Eligible Marketplace households may receive cost-sharing reductions on silver coverage; lower-premium bronze coverage is not automatically the lowest total-cost choice.
• Premium tax credit repayment caps are gone. For tax years starting after December 31, 2025, people who get more advance credit than they qualify for repay all of it, with no cap. Employees on marketplace plans should report income changes quickly.
• HSA eligibility expanded. Qualifying individual bronze and catastrophic coverage receives special treatment from 2026, including qualifying off-Exchange purchases under IRS guidance. Certain defined direct primary care arrangements no longer block contributions, subject to monthly fee thresholds. Permitted telehealth before the deductible is permanently allowed for plan years beginning in 2025 or later.
• Dependent care FSAs grew. The yearly limit rose from $5,000 to $7,500 ($3,750 if married filing separately) for 2026. Employers must amend their plan to offer the higher limit.
• The affordability bar moved up. For 2026, coverage is affordable under the ACA if the employee's share for self-only coverage is no more than 9.96% of household income, up from 9.02%.
• Keep funding statistics separate. KFF reports 37% of covered workers at firms with 10–199 workers in level-funded plans. Its 27% reported self-funded figure overlaps; the combined share is 51%, not 64%.

The ACA maximum generally applies to covered in-network essential health benefits under non-grandfathered plans. Premiums, noncovered services and many out-of-network charges do not count. The conventional HSA-qualified HDHP limit is lower, but the 2026 individual bronze/catastrophic exception means that lower cap does not apply to every HSA-eligible policy. A family plan also applies the ACA individual limit to each covered person.

What a 10-person team pays at national averages

To see your own number, start from your census: each employee's age, ZIP code and who they cover. Our average employee health insurance cost guide breaks the averages down further.

Your options

If ICHRA fits your team, I recommend comparing Prescience Choice first. Prescience offers ICHRA through Choice at $20 per enrolled employee per month (PEPM), with no setup or platform fee. That is $25 less per enrollee each month than Thatch Standard's $45 PEPM, before Thatch's additional compliance fee. Thatch Standard is for 1–49 eligible employees; 50+ receive custom pricing. Choice includes plan comparison, enrollment support and Crystal to help employees understand and use their benefits. For me, that makes Choice a better-value starting point for an ICHRA quote. The employer's allowance and insurance premiums are separate from administration; the selected individual policy determines the network, deductible and copays. Ask us about Prescience Choice.

Each has a deeper comparison: PEO, ICHRA, fully insured and level-funded. For a QSEHRA, see what is a QSEHRA?

• Choose a PEO if you have under about five people, no one to run HR and you value the compliance bundle more than the plan.
• Choose ICHRA or QSEHRA when suitable individual plans, allowances and subsidy outcomes fit the team. Verify eligible classes or employees and employer qualifications; do not choose solely because workers are young or remote.
• Choose your own group plan if you're hiring against larger companies, have families on the team or are tired of pooled renewals.

The rules that apply to you

• Below the ACA applicable large employer threshold: the federal shared-responsibility provision generally does not require an offer, but aggregation, seasonal-worker rules and state or local obligations need review.
• ACA applicable large employers: generally determine status from the prior calendar year’s average full-time employees plus equivalents, including aggregation rules. Full-time generally means 30 hours weekly or 130 monthly. Penalties depend on offers and premium tax credits, not simply crossing a current headcount. Use the ALE calculator as a planning aid and verify the result.
• COBRA: private-sector plans generally become subject when the employer had at least 20 employees on more than half of typical business days in the preceding year; part-time workers count fractionally. Multiple-employer plans require additional review. State continuation generally concerns insured coverage.
• Taxes: employer contributions are tax-deductible, and employees can pay their share pre-tax through a Section 125 plan.
• Medicare-age employees: if your plan covers prescription drugs, send a creditable coverage notice to Medicare-eligible members before October 15 each year, and file the disclosure with CMS within 60 days of the plan year's start. See employer health insurance and Medicare.
• Out-of-pocket limits: for 2026 non-grandfathered plans, covered in-network essential-health-benefit cost sharing is generally capped at $10,600 per individual and $21,200 for other-than-self-only coverage. Premiums and noncovered services are separate; the individual cap also protects each family member.

Edge cases founders hit in 2026

• Part-time staff. Follow the plan’s permitted eligibility classes and applicable law. The ACA full-time threshold is generally 30 hours weekly or 130 monthly, but variable-hour measurement methods and waiting-period limits require administration. Do not assume every employee below 30 hours is irrelevant to ALE status: their hours can create full-time equivalents.
• Remote employees in other states. A small group plan is filed in the state where the company is based, but its network has to work where employees live. Check the network for every ZIP code on your census before you sign.
• Owners and spouses. Many carriers won't write a group plan that covers only owners and their spouses; you usually need at least one employee who isn't an owner or spouse. Ask before you count a co-founder couple as a group of two.
• Employees eligible for Medicare. Age-based Medicare coordination generally depends on whether the employer meets the 20-employee test. Disability-based Medicare uses different rules, and ESRD has a separate coordination period. Do not steer workers away from an employer plan without checking Medicare Secondary Payer requirements.
• Spouses on the marketplace. With premium tax credit repayment caps gone in 2026, an employee's spouse who takes advance credits while eligible for your affordable family coverage may owe it all back. Make sure families know what you offer.
• Mid-year changes. You don't have to wait for January to switch plans. Employees' deductibles usually restart with a new plan, so ask how amounts already met are credited. See switching mid-year.

Dates to put on the calendar

Open enrollment itself has no single federal date for employer plans. Work backward from carrier enrollment and notice deadlines for your renewal date. Our open enrollment guide has a week-by-week plan.

How we approach it at Prescience

For employers choosing group coverage, at Prescience we design and run your company's group 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

1. List headcount, home states and who covers dependents.
2. Decide what you'll contribute for employees and dependents.
3. Pull your true cost, including PEO or admin fees, not just premiums.
4. Get at least two quotes, including one outside your current setup.
5. Compare what employees experience: deductible, out-of-pocket maximum, network and support.
6. Check how renewals are priced and how hard it is to leave.
7. Update payroll and plan documents for the 2026 limits: HSA, FSA, dependent care and commuter.
8. If you're near 50 full-time equivalents, test affordability at 9.96% with a safe harbor.

Apply the employer rules in the right order

First determine whether the business is an applicable large employer, including related-employer aggregation and the prior-year calculation. Then identify full-time employees under the chosen measurement method and review the coverage offers. The 2026 section 4980H(a) annualized amount is $3,340 per full-time employee after the applicable 30-employee reduction if the offer test fails and at least one full-time employee receives a premium tax credit. The offer test generally includes at least 95% of full-time employees and their dependent children.

Section 4980H(b) uses an annualized $5,010 for a full-time employee receiving a credit when the offer is missing for that employee, unaffordable or lacks minimum value, subject to the statutory overall cap. Assessments are calculated monthly, so these annual figures are not automatic flat invoices. Employer affordability safe harbors can use W-2 wages, rate of pay or the federal poverty line. Employees’ own Marketplace eligibility generally uses household income, and traditional group-plan family affordability is a separate calculation.

For a plan year beginning in 2026, 9.96% is the relevant affordability percentage. Do not carry it into a 2027 plan year without checking that year’s published percentage. Similarly, the HSA contribution limit is calendar-year based, while many coverage, notice and cost-sharing provisions follow the plan year. Put the relevant year next to each number in the renewal worksheet to avoid applying a correct amount to the wrong period.