Key Points:
- Health insurance premiums in the U.S. are expected to rise in 2026, with workers facing increased payroll deductions.
- Despite this trend, a few forward-thinking employers are offering zero-premium health insurance to their employees, covering all costs up-front.
- Companies offering this benefit believe it improves recruitment, reduces turnover, and allows employees to focus on their work without the stress of navigating high health care costs.
Health insurance premiums in the United States are set to rise sharply in the coming year, with many workers expected to see their paycheck deductions increase by 6% to 7% on average. This comes as health care costs continue to outpace inflation, contributing to the already high premiums for employer-sponsored plans. Last year, the average annual premium for a family of four was over $25,500, with employers covering roughly $19,200 and workers contributing around $6,300. Since 2019, premiums have risen by more than 24%, and experts anticipate similar surges in 2026.
Rising Costs of Health Insurance
The escalating costs are a result of several factors. For-profit entities within the health care system — including drug manufacturers, pharmacy benefit managers, hospitals, and insurance companies — have collectively driven up the cost of medical care. The development of new, often expensive treatments, such as GLP-1 weight loss drugs and cancer therapies, has added to the financial burden. Meanwhile, the COVID-19 pandemic disrupted health care access, but now that more people are returning to doctors and hospitals, demand has increased, along with costs. In addition, the consolidation of many health care companies has led to fewer players in the market, often resulting in higher prices for services.
A Solution for Some Employees: Zero-Premium Health Insurance
While many employers struggle to absorb these rising costs, some companies are taking a bold step by offering their employees zero-premium health insurance. This means that workers pay nothing upfront for their health coverage, which could otherwise see significant hikes in deductions.
For example, Boston Consulting Group (BCG) covers all health insurance premiums for its approximately 10,000 U.S. employees and their families. As a result, no money is deducted from their paychecks for health insurance premiums. According to Alicia Pittman, BCG’s Chief People Officer, offering zero-premium insurance is part of their broader strategy to maintain a productive and happy workforce: “Healthy employees make for a productive workforce — and also a place where our teams want to come to work every day,” she said. BCG’s decision to cover the premiums for both employees and their families is a significant financial investment, though Pittman did not specify the exact amount.
Offering free health insurance premiums is a move that has helped BCG attract new talent and reduce turnover, making it a key part of their recruitment strategy. It also helps employees focus on their work rather than stressing over the high costs associated with navigating the U.S. health care system.
Smaller Employers and Nonprofits Following Suit
Though uncommon, it is not just large corporations like BCG that are offering zero-premium health insurance. Some smaller employers, including startups and nonprofits, are also making the decision to cover all health insurance premiums for their employees. According to benefits consultant Mercer, about 12% of large employers provide at least one medical plan with no premium cost for individual employees. However, only about 2% offer zero-premium coverage for dependents.
One example is Zocdoc, a health tech company that makes appointment scheduling software. Oliver Kharraz, the CEO of Zocdoc, explained that his company covers the full premiums for employees who choose the zero-premium plan. However, employees who choose this plan must agree to a higher deductible. To mitigate this, Zocdoc also contributes to a health savings account to cover some of the deductible. Kharraz acknowledged that the cost of offering zero-premium health insurance is rising, but he believes it is essential to the company’s success: “It is a growing expense, no doubt. But we think that it’s our job to make sure that the company is healthy enough that we can afford to bear it,” he said.
The Bartesian Example: Zero-Premium Insurance as a Recruiting Tool
For Ryan Close, the CEO of the Chicago-based startup Bartesian, offering zero-premium health insurance was a decision he made early on. Close, who moved to the U.S. from Canada, had his first wake-up call about the high costs of health care when he needed to pick up a prescription after his family moved to the U.S. in 2019. “It was like, ‘Whoa … this is a wake-up call. And this isn’t cheap,'” Close recalls.
Bartesian, a rapidly growing company that sells an at-home cocktail machine, offers zero-premium health insurance to its employees as part of its efforts to recruit and retain talented individuals. Close has raised $40 million in funding for his company, and providing zero-premium health insurance has become a key differentiator in a competitive market for talent.
While Bartesian may not offer all of the benefits typically found at larger corporations, such as a formal parental leave policy, Close believes that the health care benefit speaks volumes about the company’s values. “We’re saying something about how we are as a company, where we value our team members,” he explained. “We think that them being able to take care of their children and their wives and their husbands is a priority.”
The Bigger Picture: Rising Health Care Costs Across the U.S.
While companies like Zocdoc, Bartesian, and BCG may be able to absorb the rising costs of health insurance, the majority of employers are not in a similar position. Rising premiums are becoming a major financial burden for businesses, and many employees are seeing larger deductions from their paychecks. The U.S. health care system continues to face mounting criticism for its high costs, and the trend of rising premiums is unlikely to change soon.
At the same time, however, companies offering zero-premium health insurance are setting an example for others. They believe that investing in employees’ health and wellbeing helps boost productivity and ensures long-term success. Despite the growing expense, offering zero-premium health coverage may become a valuable tool for companies looking to attract top talent in a highly competitive job market.
For now, though, the number of companies offering this benefit remains a small minority, and for most U.S. workers, health insurance premiums will continue to rise in 2026.