Health insurance premiums for small businesses, including independent medical practices, are set to rise 11.0% in 2026, according to KFF's review of preliminary rate filings from 318 insurers across all 50 states and Washington, D.C. That is nearly double the 6.0% increase small groups absorbed going into 2025, and it lands on top of a family plan that already averaged $26,054 a year at small firms.
The increase is not uniform. KFF's closer look at filings in 16 states and D.C. found a 12.0% median increase in that group, driven by hospital and physician price growth, specialty drug spending, and a shrinking, sicker pool of small-group enrollees as some employers drop coverage entirely.
Most independent practices fall inside the size band KFF tracks separately from large employers: firms with 10 to 199 workers. A solo practitioner's office and a forty-person billing company compete for coverage in the same small-group insurance pool, priced against the same rating rules, regardless of how different their patient volume or revenue looks.
What a Small Practice Paid for Coverage in 2025
KFF's 2025 Employer Health Benefits Survey, based on interviews with 1,862 firms conducted between January 27 and July 23, 2025, put the average family premium at small firms of 10 to 199 workers at $26,054 a year, against $27,280 at firms with 200 or more workers. Average single coverage ran $9,211 at small firms and $9,361 at larger ones, a much narrower gap than on the family side.
Practices that offer family coverage also ask employees to pay more of it. Workers at small firms covered 36.0% of the family premium on average, or $8,889 a year, compared with 23.0%, or $6,227, at larger firms. Among small-firm workers enrolled in family coverage, 29.0% paid more than half of the premium themselves, KFF found.
| Measure, 2025 | Small firms (10-199 workers) | Firms with 200+ workers |
|---|---|---|
| Average family premium | $26,054 | $27,280 |
| Average single premium | $9,211 | $9,361 |
| Worker share of family premium | 36.0% | 23.0% |
| Worker family contribution, dollars | $8,889 | $6,227 |
| Workers with a $2,000+ single deductible | 53.0% | 28.0% |
| Firms offering health benefits | 59.0% | 97.0% |
Source: KFF, 2025 Employer Health Benefits Survey, published October 22, 2025.
Deductibles and Offer Rates Run Against Small Practices
Cost sharing follows the same split. The average single-coverage deductible at a small firm was $2,631 in 2025, and 53.0% of small-firm workers were enrolled in a plan with a deductible of $2,000 or more, compared with 28.0% at firms of 200 or more workers, KFF reported. A ten-person practice negotiates group coverage from a weaker position than a hospital system with 3,000 employees, and the deductible gap is one place that shows up in the numbers.
Fewer small firms offer coverage at all. KFF found that 59.0% of firms with 10 to 199 workers offered health benefits in 2025, compared with 97.0% of firms with 200 or more workers. Across all firms with at least 10 workers, the offer rate was 61.0%. KFF's survey drew a 13.0% response rate, with 1,862 firms completing the full interview and 2,560 answering at least the coverage-offer question.
Why 2026 Is a Bigger Jump Than the Prior Two Years
The 11.0% median increase KFF calculated for 2026 breaks a run of smaller annual jumps. Average family premiums across all firm sizes rose 7.0% in 2024, to $25,572, then 6.0% in 2025, to $26,993, according to KFF's survey data. Over the five years from 2019 to 2024, family premiums climbed a cumulative 24.0%, ahead of the 23.0% rise in general inflation but behind the 28.0% growth in wages over the same span.
Insurers cited an underlying medical cost trend running close to 9.0% for 2026 in their rate filings, on top of specialty drug spending and continued attrition from the small-group market. Some carriers responded by excluding GLP-1 weight-loss drugs from 2026 small-group plans rather than pricing the coverage in, according to KFF's review of the filings.
What It Means for a Practice's Budget
For an independent practice, employee health coverage sits next to payroll as one of the least flexible costs on the books. A practice with 15 employees offering family coverage to five of them, at the small-firm average premium of $26,054 minus the typical $8,889 worker contribution, is committing roughly $85,825 a year in employer contributions before the 11.0% increase for 2026 is applied to the next renewal.
The gap between small and large employers on contribution share and deductible size also plays out at the recruiting table. A candidate comparing offers is comparing a 36.0% employee premium share against 23.0% at a larger competitor, and a 53.0% chance of landing on a $2,000-plus deductible plan against 28.0%. Worker contributions toward family coverage across all firm sizes rose from $6,296 in 2024 to $6,850 in 2025, so the gap was widening even before the 2026 increase.
This cost does not appear on a denial report or an accounts-receivable aging summary, the figures most practice dashboards track by default. It arrives once a year, on a renewal bill, and competes for the same budget as staff wages and the technology spending independent practices tend to watch more closely month to month.
Renewal notices for 2026 plan years are arriving this fall, and the rate a given practice is quoted will show whether its carrier tracked the 11.0% national median or the steeper 12.0% median KFF found in the 16 states it reviewed in detail.
Sources
- KFF, "How Much and Why Premiums are Going up for Small Businesses in 2026," September 24, 2025
- KFF, "2025 Employer Health Benefits Survey," published October 22, 2025
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