Premiums Rise 3% for Employer-Sponsored Family Coverage

Average annual premiums for employer-sponsored family health coverage reached $16,834 this year, up 3% from last year. This continues a recent trend of modest increases, according to a survey by the Kaiser Family Foundation/Health Research & Educational Trust (HRET). Workers are paying an average of $4,823 annually toward family coverage this year. The increase continues a recent trend of moderate premium growth. Premiums have increased 26% over the past five years compared to 34% in the previous five years and well below the annual double-digit increases recorded in the late 1990s and early 2000s. This year’s increase also is similar to the year-to-year rise in worker’s wages (2.3%) and general inflation (2%). Annual premiums for worker-only coverage are $6,025 this year. Workers have contributed an average $1,081 toward the cost of worker-only coverage this year. The survey also reveals the following:

  • 80% of covered workers have a general annual deductible, with the average reaching $1,217. For most services, workers typically pay this deductible before their health plan provides coverage. Since 2009, the average deductible has risen 47% from $826. “The deductibles for workers have crept higher over time, topping $1,200 on average this year. Today, four in 10 covered workers have at least a $1,000 deductible, nearly double the share from just five years ago,” said study lead author Gary Claxton, director of the Health Care Marketplace Project.
  • 41% of covered workers have an annual deductible of at least $1,000, including 18% with a deductible of at least $2,000. Sixty-one percent of covered workers at small firms (three to 199 employees) have deductibles of least $1,000; and 34% have deductibles of at least $2,000.
  • There has been little change in other forms of cost sharing, including co-payments for in-network physician visits (an average of $24 for primary care and $36 for specialists) and for prescription drugs ($11 for generics, $31 for preferred brands, $53 for non-preferred brands and $83 for specialty drugs).
  • 98% of large employers that offer health benefits also a wellness program. 73% of smaller employers that offer health benefits also a wellness program. 36% of large employers that offer wellness programs provide a financial incentive participation, such as a lower premium or deductible, a larger contribution to a tax-preferred savings account, a gift card, cash, or merchandise.
  • 18% of small employers that offer wellness programs provide a financial incentive for workers to participate, such as a lower premium or deductible, a larger contribution to a tax-preferred savings account, or a gift card, cash or merchandise.
  • 51% of large firms (at least 200 workers) that offer health benefits also offer biometric screenings. Just 1% require workers to complete the screening to enroll in the company’s health benefits, and 8% reward or penalize workers financially based on biometric outcomes.
  • 94% of employers with at least 100 workers offer health benefits to at least some workers.
  • 52% of employers with fewer than 50 workers offer health benefits. Since most employers are small, this group drives the offer rate for employers, which stands at 55% this year, similar to the 57% recorded last year.
  • Firms that do not offer health benefits most often cite cost-related reasons, though one in 10 say that the coverage available to workers through the ACA insurance exchanges as a factor.
  • 26% of covered workers are in grandfathered plans, down from 36% last year and 48% two years ago. This means that more workers will benefit from reforms, such as coverage of preventive benefits without cost sharing and an external appeals process.
  • Starting in January for non-grandfathered plans, the ACA set 90 days as the new limit for the waiting period before new hires become eligible for health benefits. Twenty-three percent of large firms and 10% of small firms reduced their waiting period during the past year. The average length of waiting periods for covered workers decreased from 2.3 months in 2013 to 2.1 months in 2014.
  • 23% of large firms that offer retiree health benefits are considering changes because of the ACA’s new public health insurance marketplaces.

The Foundation also released a graphic that charts the survey’s premium trends since 1999 for different types of firms. For more information, visit http://kff.org/EHBS.

Last Updated 10/14/2020

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