Employer-Sponsored Family Health Premiums Rise a Modest 4%

CostSavings

Annual premiums for employer-sponsored family health coverage reached $16,351 in 2013, up 4% from in 2012, with workers paying an average of $4,565 toward the cost of their coverage, according to a report by the Kaiser Family Foundation/Health Research & Educational Trust. The rise in premiums is moderate by historical standards. Since 2003, premiums have increased 80%, nearly three times as fast as wages and inflation.

“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,” said Kaiser President and CEO Drew Altman, Ph.D.

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

In 2013, 78% of all covered workers had an annual deductible, up from 72% in 2012. Typically, workers pay this deductible before most services are covered by their health plan. The average deductible for worker-only coverage was $1,135 in 2013, similar to the $1,097 average deductible in 2012.

In 2013, 38% of all workers had a deductible of at least $1,000 or more compared to 58% of workers at small firms. In fact, 31% of workers at small firms had a deductible of at least $2,000 in 2013, up from 12% in 2008.

In 2013, 35% of employers said that wellness plans are very effective in controlling costs compared to 22% who cited disease management, 20% who cited consumer-driven health plans, and 17% who cited higher cost sharing.

Nearly all large employers (at least 200 workers) offered at least one wellness program. Thirty-six percent of large employers that offered wellness programs provided financial incentives for participation, such as lower premiums or deductibles, a larger contribution to a tax-preferred savings account, gift cards, cash, or other direct financial incentives. Fifty-five percent of large firms that offered health benefits also offered biometric screenings, and 11% rewarded or penalized 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 status and outcomes. “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,” said KFF vice president Gary Claxton.

Thirty-six percent of covered workers were in grandfathered plans, down from 48% in 2012. 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 effect of this provision.

In 2o13, 29% of employers with at least 5,000 workers were considering offering benefits through a private exchange. These jumbo 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.

Fifty-seven percent of firms offered health benefits in 2013, which is statistically unchanged from the 2012 and 2011. Nearly all firms with at least 200 workers offered health benefits to at least some of their workers.

Forty-three percent of the smallest firms (three to nine workers) offered health benefits in 2013 compared to 50% in 2012. Also, 23% of firms with a lot of low-wage workers offered health insurance compared to 60% of firms with few low-wage workers. For more information, visit http://kff.org/EHBS.

Last Updated 04/14/2021

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