Every year, the Kaiser Family Foundation (KFF) conducts a survey on employer health benefits. The 2018 survey results are out, and the results should be of interest to anyone involved in employee benefits. These are the essential highlights regarding premiums, employee contributions and retiree benefits.
Most people get their insurance through work.
Although some people get their health insurance through government programs or through private insurance purchased directly, employer-sponsored health insurance continues to be a primary source of coverage.
According to KFF, 152 million non-elderly individuals get insurance through work, accounting for more than half of the non-elderly population. This means that employer-sponsored benefits continue to be of the upmost importance for the average person.
Premiums continue to increase.
The average premium for employer-sponsored single coverage was $6,896 in 2018, an increase of 3 percent compared to the previous year. The average premium for employer-sponsored family coverage was $19,616, an increase of 5 percent. Premiums are highest in the Northeast compared to other regions.
It should be noted that these increases are greater than the increases seen in wages and inflation, which are 2.6 percent and 2.5 percent, respectively.
Workers are also often required to participate in cost sharing, with 85 percent of insured workers having to pay an annual deductible before coverage kicks in for most services. The average deductible was in 2018 was $1,573.
Employee contributions vary widely at smaller firms.
Employees pay a significant amount of this premium, although how much depends on where they work. Overall, employees paid an average of 18 percent of the premium for single coverage, or $1,186, and 29 percent for family coverage, or $5,547, but workers tend to pay a higher contribution in firms with a high percent of low-wage workers.
Significant variations were also seen in smaller companies, defined as those with fewer than 199 workers. Workers at smaller companies have slightly lower family coverage premiums, but they pay a higher percentage of those premiums. They also have a higher deductible: $2,132 for self-coverage at smaller firms compared to $1,355 for self-coverage at larger firms.
Workers at smaller firms also see much more variation in terms of the contribution they are required to make, with 27 percent having to pay nothing for self-coverage, while 34 percent have to pay more than half for family-coverage.
Not everyone is eligible.
Nearly all companies that offer benefits to workers also offer benefits to dependents, although some may provide incentives not to enroll or to enroll in a spouse’s plan.
Retiree benefit options are becoming less common, with only 18 percent of larger firms offering retiree coverage in 2018. The larger a company is, the more likely it is to offer retiree benefits. Public companies and companies with union workers are also more likely to offer retiree benefits.
Less than half of companies with only three to nine workers provide coverage. Larger firms are much more likely to offer coverage, but only an average of 79 percent of workers are considered eligible. Because not all eligible workers accept coverage, only 60 percent of workers at companies that offer coverage are covered through the company.
The number of enrollees may go down in the near future, as 9 percent of small firms and 24 percent of large firms expect enrollment to drop now that the penalty for not complying with the ACA’s individual mandate is being dropped.
Now that you know the health benefit norms, you and your clients can compare how your benefit packages stack up in the quest to attract and retain top talent!
Reminder: As discussed in a previous article, employee benefits ACA reporting is still required. Need help with 1094/1095 report automation? Download our ACA Compliance Cheat Sheet here.