Kaiser Family Foundation (KFF) publishes an annual Employer Health Benefits Survey to provide a detailed look at the various trends that occur in employer-sponsored health benefits. For 2014, there are some subtle and prominent changes to know about. The survey includes premiums, employee contributions, cost-sharing provisions, and other relevant information.
Employer Health Insurance Survey Background
The 2014 survey includes nearly three thousand interviews with non-federal public and private firms. In 2014, premiums for employer-sponsored family health coverage averaged $16,834 annually, 3 percent higher than last year. On average, workers paid $4,823 annually towards their coverage in 2014. The survey can be found at KFF’s website.
Employer Health Insurance Key Findings
The 2014 survey found that:
Premiums for family coverage increased by 3% over 2013.
Single coverage premiums are 2% higher than in 2013.
The percentage of firms (55%) which offer health benefits to at least some of their employees and the percentage of workers covered at those firms (62%) are statistically unchanged from 2013.
The percentage of covered workers enrolled in grandfathered health plans – those plans exempt from many provisions of the Affordable Care Act (ACA) – declined to 26% of covered workers from 36% in 2013.
Premiums Increased 3% Over Last Year, and $10,560 Since 1999
In 2014, the average premium for a single employee was $6,025 annually ($502 per month), and for family coverage, $16,834 annually ($1,403 per month). Compared to 2013, this represents a 3% increase for individuals and a 3% increase for families. Premiums have more than doubled since 2002, and increased $10,560 since 1999.
Average Employee Contribution is 18%
On average in 2014, employees contributed 18 percent of the premium for individual coverage and 29 percent of the premium for family coverage. This translates to $90 per month for individual coverage and $402 per month for family coverage.
There are differences by firm size as well. The covered workers in small firms (3-199 workers) contribute a lower percentage of premium for single coverage (16 percent versus 19 percent) but a higher percentage of the premium for family coverage than covered workers in larger firms (35 percent versus 27 percent).
Employees at Smaller Firms Pay More for Family Coverage
According to the health insurance survey, small firms with 3-199 workers contribute a lower amount annually for single coverage versus workers in larger firms of 200 or more workers. The difference is $902 compared to $1,160, respectively. Workers in smaller firms with family coverage contribute much more annually than those of large firms ($5,508 vs. $4,523).
56% of Micro Firms (3-9 Employees) Don’t Offer Health Insurance
According to the survey, nearly all (98 percent) of large firms of 200 or more workers offered health insurance to their employees. As much as 44 percent of smaller companies are less likely to offer health benefits as seen in the figure below.
From 1999 to 2014, all firms who offered health insurance has stayed somewhat steady. In 1999, 66 percent of all firms were offering health insurance whereas today, 15 years later, 55 percent are offering it. These numbers represented are taking into account the higher average of larger companies and the lower average of smaller companies.
Younger and Lower Wage Employees Less Likely to Have Health Benefits Offered
According to the survey, those firms with fewer lower-wage workers (fewer than 35 percent of workers earn $23,000 or less annually) have a higher probability of offering health insurance than firms that have a large sum of lower-wage workers (55 percent vs. 33 percent).
Primary Reason for Not Offering Health Benefits - Cost
Similar to 2013, the main reason firms do not offer health benefits is because of cost. Of smaller firms (3-199 workers) that do not offer health benefits, 32 percent say that high cost is the “most important reason” as to why they are not offered. Another reason is that employees are “generally covered under another plan” (24 percent). Nine percent of firms say that “employees have other options, including exchanges” and one percent said “employees will get a better deal on the health insurance exchanges.”
Among non-offering small firms (3-199 employees), seven percent say that they provide funds to their employees so that they can purchase their own insurance through the individual market. Much like last year, the percentage of firms offering funds to purchase non-group coverage is at ten percent.
Reasons that employees may not get coverage from 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
The employer health insurance survey found the rate of workers who will take advantage of their employer’s coverage has gone nearly unchanged since 2013 at 80 percent. Workers’ decision to accept their firms insurance is affected by the workforces’ wage level as well. Workers that are eligible in firms with a lower proportion of lower-wage workers are more likely to take the coverage that their employer offers (81 percent). In contrast, 67 percent of eligible employees in firms with a higher proportion of lower-wage workers (35 percent of workers earn $23,000 or less annually) were likely to use the coverage.
When it comes to both firms that do offer health benefits and those that do not offer them, 55 percent of workers are covered under their employer’s plan. The coverage rate has been slowly decreasing with time, down from 59 percent in 2009 and 61 percent in 2004.
PPO Plans Remain the Most Popular
As in 2013, PPO plans are still the most popular--they account for more than half of workers that are covered for 2014. HDHP/SOs, HMO plans, POS plan, and conventional plans follow, respectively. Among the market shares of health plans, their distribution varies depending on the firm size. As an example, PPOs are generally more popular for covered workers at larger firms (200 or more workers) than smaller firms (63 percent vs. 46 percent) and POS plans remain popular among smaller firms over large firms (17 percent vs. 4 percent). Those enrolled in HDHP/SO plans (20 percent) have remained unchanged since 2012 at 19 percent.
HDHP/SO enrollment has changed dramatically since 2006, however, for 2014 those numbers seemed to have stayed identical to those of 2013. HDHP/HRA plans have seen a 2 percent decrease, while HSA-Qualified HDHP numbers have risen by 3 percent since 2013.
Percentage of Firms with Grandfathered Plans Declining
In 2011 the percentage of firms that have at least one health plan that was grandfathered in was 72 percent. In 2012 it dropped to 58 percent, 54 percent in 2013, and it has dropped yet again for 2014 to 37 percent.
Employer Opinions on Cost Saving Strategies Vary with Firm Size
Of the firms that were asked to rate how effective they felt different cost-saving strategies were, 28 percent offering health benefits stated that “wellness programs” would be very effective at containing health insurance costs. Twenty-two percent of firms thought that consumer-driven health plans would be very effective.
Six percent of firms offering health insurance thought that narrow networks would be effective at containing health insurance costs, and ten percent of firms thought that “tighter managed care restrictions” would be beneficial. Lastly, 11 percent stated that “tiered provider networks” would be the most effective way of containing health costs.
How do these results compare to last year? See: Employer Health Insurance Survey 2013