Employer-Sponsored Family Health Premiums Rise 4%

Annual premiums for employer-sponsored family health coverage reached $16,351 this year, up 4% from last year, with workers paying an average of $4,565 toward the cost of coverage, according to a survey by the Kaiser Family Foundation/Health Research & Educational Trust (HRET). During the same period, wages were up 1.8% and general inflation was up 1.1%.

Kaiser president and CEO Drew Altman, Ph.D., said, “This year’s rise in premiums remains moderate by historical standards. Since 2003, premiums have increased 80%, nearly three times as fast as wages (31%) and inflation (27%). We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers.”

The survey reveals that firms with many lower-wage workers (at least 35% earning $23,000 or less annually) require workers to pay an average of $1,363 more toward family premiums than workers at firms with fewer lower-wage workers ($5,818 versus $4,455 annually). The lower-wage firms offer less costly coverage too, creating a large disparity in the share of the premium that their workers pay (39% versus 29%).

This year, 78% of all covered workers face a general annual deductible, up from 72% in 2012. Workers usually pay this deductible before most services are covered by their health plan. The average deductible for worker-only coverage is $1,135, similar to the $1,097 average deductible in 2012.

Thirty-eight percent of covered workers have a deductible of at least $1,000 or more. At small firms, 58% of covered workers have deductibles of at least $1,000, including 31% who face deductibles of at least $2,000, which is up from 12% in 2008.

In 2013, 35% of employers say wellness plans are very effective for controlling costs compared to 22% who say that disease management programs are very effective, 20% who say that consumer-driven health plans are very effective and 17% who say that cost sharing is very effective.

Nearly all large employers (at least 200 workers) offer at least one wellness program, which can take many forms and target a wide range of conditions. Thirty-six percent of large employers who offer wellness programs offer a financial incentive for workers to participate, such as lower premiums or a lower deductible, a larger employer contribution to a tax-preferred savings account, gift cards, and cash or other direct financial incentives.

Fifty-five percent of large firms that offer health benefits offer biometric screenings. And 11% of them reward or penalize workers financially based on whether they achieve biometric outcomes.

The Affordable Care Act (ACA) includes provisions that allow broader use of financial incentives to encourage workers to improve their health. Gary Claxton, director of the Foundation’s Health Care Marketplace Project said, “This will be an important issue to watch next year, as employers will have more flexibility and could ask workers to pay more because of their lifestyles and health conditions.”

Thirty-six percent of covered workers are in grandfathered plans, down from 48% last year. The shift means that more will benefit from reforms, such as coverage of preventive benefits without cost sharing and an external appeals process. The slow growth in premiums also means that fewer employer plans will be subject to the ACA’s high-cost plan tax that takes effect in 2018. The Congressional Budget Office recently reduced its estimate of the number of plans that would trigger the tax, and a continued low growth rate could further reduce the affect of this provision.

Twenty-nine percent of employers with at least 5,000 workers are considering a private exchange. These larger firms employ almost 40% of all covered workers, so their interest could indicate a significant shift in the way many people get their health insurance.

This year, 57% of firms offer health benefits to their workers, which is statistically unchanged from the 61% in 2012 and 60% in 2011. As in the past, the larger an employer is, the more likely it is to offer health benefits. Nearly all firms with at least 200 workers offer health benefits to at least some of their workers. Twenty-three percent of firms with many low-wage workers offer health insurance compared to 60% of firms with few low-wage workers.

Since most firms in the country are small, variation in the offer rate is due primarily to changes in the percentages of the smallest firms (three to nine workers) offering health benefits (45% in 2013, similar to the 50% which did so in 2012).  For more information, visit http://kff.org/EHBS.

Last Updated 12/01/2021

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