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How much employees are actually paying for their health care plans
Nurse preparing patient for CT scan in hospital room
U.S. employer health care costs are expected to rise 6.5% in 2023, according to Willis Towers Watson survey data. The survey also found that about a quarter of employers expect higher premiums to pass the cost on to their employees.
Sana collected data from the Health Care Research and Quality Agency’s Medical Cost Panel Survey insurance component to understand how employee contributions to company-sponsored health insurance plans have changed over the past 20 years. Data was collected from a survey of private sector employers in 2021 to understand the types and costs of insurance benefits offered.
In the first year of COVID-19, hospital policies and quarantines artificially suppressed the number of medical claims. Since then, medical claims have rebounded and, combined with inflation, have increased cost pressures for employers, which are expected to widen only in the next year.
Census data show that the number of adult workers with employment-based health insurance plummeted in the first year of the pandemic, but by 2021 private insurance, not public insurance, will have the largest share. accounted for the market share (66%). About 159 million people had employer-provided insurance that year, representing about 48% of the country’s population.
In 2022, 13% of employees with single-coverage health insurance had full company-funded premium payments. According to the Kaiser Family Foundation, 5% of employees were fully covered by their employer for family coverage.
Read on to find out how much your employees are really paying for their health insurance plan.
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Employee health insurance contributions have more than tripled in 20 years
Line chart showing average employee contribution to healthcare for one employee from 2001 to 2021. The line is constantly increasing.
Single coverage is a health insurance plan option that covers only individual employees. The average employee contribution over the last 20 years has nearly quadrupled when including individual employees. Affordability is therefore a significant concern for employers and employees, as health insurance premiums have risen twice as fast as average incomes or wages since 2008.
Experts predict that in 2023, two key factors will affect employer premiums: market inflation and occupancy rates. It is important to note that payer-provider agreements are often entered into for multiple years. As such, rising inflation may not directly affect contracted costs, but it can be an important factor when businesses evaluate renewal or new providers.
sana
More than 290% increase in employee plus one plans
Line chart showing contributions to healthcare for employees plus one employee from 2001 to 2021. The line is constantly increasing.
Employee Plus 1 health insurance covers one employee and one additional family member at a lower cost than family insurance.
As with the Employee Only plan, the costs of the Employee Plus 1 plan are rising much faster than employee wages and inflation. Employee contributions averaged $4,984 for small businesses, $5,526 for medium businesses, and $3,986 for large businesses.
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Over 250% increase in family coverage
Line chart showing employee contribution to family health care from 2001 to 2021. The line is constantly increasing.
Family insurance is insurance that covers employees and their families (including spouse and children).
Rising health care costs are one of the top financial concerns for American families, influencing decisions about insurance coverage and health care visits, according to a KFF poll. Over the past two decades, employee contributions to family insurance have increased significantly. However, health care costs are far more important for employees of small businesses (fewer than 200 employees). The premiums for these employees are about $2,000 higher than for employees of large companies. The current economic climate gives employers the feeling that these costs will continue to rise.
According to the KFF, the average annual contribution to family insurance by employees in 2022 will be $6,106, reflecting a 7% increase from 2017. The family plan costs significantly more, but it makes sense given that it targets a larger number of individuals. However, a larger family does not necessarily mean higher medical costs. Factors such as age and geographic location are among the factors insurers take into account when determining premiums.
This story originally appeared in Sana and was produced by
Distributed in partnership with Stacker Studio.
