Premium Increases Are Decelerating

Since 2010, average monthly health plan premiums have increased 15% to $870. However, the rate of increase has decelerated after a sharp increase of 6.9% from 2010 to 2011, according to a report by ADP. Premiums rose just 1.7% from 2013 to 2014. Health plan premiums rose for employees of all ages over the period 2010 to 2014. “It’s no secret that employers are looking for ways to reduce health benefit costs while still offering effective coverage options,” said David Marini of ADP. To reduce costs, employers may change the health plan premium tiers or levels of coverage, or they may reduce their contribution to the coverage of dependents.”
The employers’ share of contributions to health premiums declined slightly for all groups from 2010 to 2014, regardless of age or number of dependents. The largest decrease was 1.5% for those with dependents. For those with no dependents, the decrease was 1%. Employer contributions decreased across all age groups. The study also finds the following from 2010 to 2014:
• Overall participation is steady, but varies with age. The percentage of full-time employees who were eligible for employer-provided health benefits remained relatively steady at 90%. The percentage of those participating in health benefits also remained relatively constant at 68%. However, the averages do not reflect the marked variances among specific age groups. Participation rose among Baby Boomers as they continue to work into their later years, and participation declined among younger employees.
• Employees 50 to 59 participated in the largest percentage, with 73% of those eligible participating. In all groups 40 and older, participation was over 70% in 2014. In comparison, among employees under age 30, just over half participated in their employer’s health benefits program in 2014. In this group the take rate declined 7.6% between 2010 and 2014.
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Last Updated 08/10/2022

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