Economist Guy Berger, director of economic research at the Burning Glass Institute, said employer health insurance contributions jumped 6.4% in the third quarter, matching the fastest pace in two decades, adding that “employees are paying a bigger share of premiums.”
Berger made the remarks in a Substack post in which he calculated that wage growth would be about 0.2-0.3 percentage points faster today if employer contributions had grown at 3%, the pace of a few years ago. “That’s not a lot, but not nothing either,” he wrote.
Berger on Wages and Health Insurance Costs
The Bureau of Labor Statistics released the employment cost index on Friday, showing wages and salaries increased 3.1% in the third quarter from a year ago.
Berger said the data likely understates the squeeze on workers because employer contributions might not be keeping pace with health insurance costs. He added that insurance plans are also covering less, forcing workers to pay more expenses out of pocket.
KFF on Affordable Care Act Premiums
Separately, KFF, a health-research nonprofit, said premiums for Affordable Care Act plans will rise 13% in 2027, based on federal data released Friday. That is the second-biggest increase since 2018 and follows a 26% jump in 2026. The average monthly benchmark premium for a 40-year-old buying a mid-tier plan will be $704, up from $624 in 2026 and $497 in 2025.
KFF counted 31 state-level departures by insurers from the marketplace as of late October, against eight additions. It said several insurers expect the market to keep deteriorating in 2027 as the enhanced premium tax credits end.
Employer Coverage Costs for Workers
Employer plans also saw rising costs in a KFF survey released in October, which found workers’ average annual contribution toward family premiums rose 9% to $7,471 in 2026. The average annual family premium rose 5% to $28,303, while workers’ earnings rose an average of 3.7% against inflation of 2.7%, the survey said.
Looking ahead, personal finance expert Suze Orman wrote in a blog post that employers expect health benefit costs to rise an average of 8.2% in 2027 and could pass more costs to workers.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
