Every year, Kaiser Family Foundation publishes its annual Employer Health Insurance Survey. The survey provides a detailed look at trends in employer-sponsored health benefits, including premiums, employee contributions, cost-sharing provisions, and other relevant information.
Employer Health Insurance Survey Background
The 2013 survey included 2,067 randomly selected public and private firms with three or more employees. Surveys were completed from January to May 2013. Of those surveyed, 1,622 of the 2,067 firms that completed the full survey also participated in either the 2011 or 2012 surveys, or both. For more information on survey methodology, see KFF's website.
Employer Health Insurance Key Findings
The 2013 survey found that:
Since 2012, individual premiums increased by 5% to $5,884/year; family premiums increased by 4% to $16,351/year.
On average, employees contribute 18% of their premium for individual coverage and 29% of their premium for family coverage.
Smaller firms are less likely to offer health benefits compared to large firms (45% compared to 99%, respectively). The number one reason small firms don't offer health benefits is cost.
Younger workers and lower wage workers are less likely to have employee health benefits offered.
On average, 80% of eligible employees opt for health benefits coverage.
Conventional plans have decreased in popularity, while high deductible health plans (HDHP) plans have increased to 20% of all plans offered. PPO plans, however, are still the majority at 57%.
Premiums Increased 5% Over Last Year, 168% Since 1999
In 2013, the average premium for a single employee was $5,884 annually ($490 per month), and for family coverage, $16,351 annually ($1,363 per month). Compared to 2012, this represents a 5% increase for individuals and a 4% increase for families. Premiums have more than doubled since 2002, and increased 168% since 1999.
Average Employee Contribution is 18%
On average in 2013, employees contribute 18% of the premium for individual coverage and 29% of the premium for family coverage. This translates to $83 per month for individual coverage and $380 per month for family coverage.
Single premium employee contributions have increased by 97% since 2003, and 39% since 2008. Family premium employee contributions have increase by 89% since 2003, and 36% since 2008.
Employees at Smaller Firms Pay More for Family Coverage
Employees at smaller firms (<200 employees) contribute, on average, 15% of their premium compared to 18% at larger firms (>200 employees). However for family coverage, employees at smaller firms contribute 34% of their premium compared to 25% at larger firms.
55% of Micro Firms (3-9 Employees) Don't Offer Health Insurance
According to the survey, nearly all (99%) of large firms with 200+ employees offer health insurance to their employees. As the size of the company gets smaller, the employer is less likely to offer health benefits.
Between 1999 and 2013, the rate of firms offering health benefits with 200 or more employees has stayed consistent at 97% or higher. However, because the United States is dominated by small firms (98% of firms in the U.S. have less than 200 employees), the overall offer rate is largely determined by the changes in small firm health benefits offerings.
Younger and Lower Wage Employees Less Likely to Have Health Benefits Offered
The wage, age, and employee status of workers plays a role in probability a company will offer health benefits.
For example, of firms with at least 65% of workers earning $23,000+, 60% offer health benefits. Whereas, of firms with at least 35% of workers making less than $23,000, only 23% offer health benefits.
Firms with younger employees are less likely to offer health benefits than firms with older employees. For example, of firms with 35% or more of its workers age 26 or younger, 23% offer health benefits. Whereas, of firms with less than 35% of workers age 26 or younger, 59% offer health benefits.
Temporary workers are rarely offered health benefits, with only 3% of firms who offer health benefits providing it to temporary or seasonal workers.
Primary Reason for Not Offering Health Benefits - Cost
The main reason firms say they do not offer health benefits is cost. Among firms with less than 200 employees, 50% say that the main reason is “cost”, 16% say that the “firm is too small”, and 15% say that “employees are generally covered by another plan.”
According to the survey, 149 million Americans are covered by employer-sponsored insurance. Of these, 62% of workers are covered by health benefits through their own employer.
Reasons that employees may not be covered by their employer include:
Their employer does not offer coverage
They are ineligible for benefits offered by their firm
They choose to elect coverage through their spouse’s employer
They refuse coverage from their firm
80% of Eligible Workers Will Opt for Coverage if Offered
According to the survey, 77% of workers offered health benefits are eligible for participation. Rate of eligibility varies by wage and age. Of employees in firms with a larger proportion of employees making a higher salary (35% or more of workers earning $56,000 or more), 84% are eligible for their employees health insurance. Of employees in firms with 35% of employees making $23,000 or less, 61% are eligible.
When it comes to age, those in firms with fewer younger workers (less than 35% of workers are age 26 or younger) are more likely to be eligible for health benefits than are workers in firms with many younger workers (78% versus 63%).
Of employees that are offered health benefits and are eligible, ~80% opt for coverage.
PPO Plans Remain the Most Popular, But Big Shift to HDHP
The most popular plan type in 2013 is a PPO, followed by HDHP/SO, then POS plans, and conventional plans the least popular. Enrollment varies by firm size. PPOs are more popular in large firms, and POS are more popular in small firms.
Conventional and HMO plans have become a less popular choice for employers in the last decade, while HDHP/SO plans have been on the rise. This is largely due to cost containment.
HDHP/SO enrollment has significantly increased in the past years. As of 2013, 20% of covered workers are enrolled in a HDHP/SO. This includes high-deductible health plans offered with an integrated HRA or HSA.
54% of Firms with Health Benefits Have a Grandfathered Plan
According to the survey, 54% of firms offering health benefits in 2013 have at least one plan that is considered a grandfathered plan. Small firms are more likely to have employees insured under a grandfathered plan than a large firm (49% vs. 30%).
Employer Opinions on Cost Saving Strategies Vary with Firm Size
How are firms dealing with the cost increases? When asked about the most effective cost containment strategy, 67% say a wellness program is somewhat or very effective. And, 61% say a consumer-driven health plan strategy is somewhat or very effective.
To read the full survey findings and view additional chart packs see: 2013 Employer Health Benefits Survey.
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