Family premiums for employer-sponsored health insurance rose 4% over the past year, averaging $21,342, according to the benchmark Kaiser Family Foundation (KFF) 2020 Employer Health Benefits Survey.
Conducted from January to July of this year, the annual survey, whose findings were also published in the journal Health Affairs, polled 1765 nonfederal public and private firms on their employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, offer rates, wellness programs, and employer practices.
Although it does not capture the full scope of the impact of the coronavirus disease 2019 (COVID-19) pandemic on health care costs and coverage, survey results still exhibit the rising cost that employees are responsible for contributing. On average, the study found that workers are paying $,588 in out-of-pocket costs toward family coverage, with employers paying the remaining amount.
“Conducted partly before the pandemic, our survey shows the burden of health costs on workers remains high, though not getting dramatically worse,” said Drew Altman, president and chief executive officer of KFF, in a statement. “Things may look different moving forward as employers grapple with the economic and health upheaval sparked by the pandemic.”
Although the annual change in premiums is similar to the year-to-year rise in workers’ earnings (3.4%) and inflation (2.1%), the amount paid in premiums by employers and workers was indicated in the accompanying press release to be rising more quickly than wages and inflation. In fact, average family premiums have increased 55% since 2010, a pace more than twice as fast as wages (27%) and inflation (19%) during that time span.
For single coverage, the average annual premium increased by 4% ($7740), with covered workers contributing 17% of the cost. Moreover, 83% of covered workers were found to have a deductible in 2020, up from 70% a decade ago, with the average single deductible totaling to $1644 for workers, a stark rise from the $917 average of the last decade.
Combining these 2 trends, a 111% increase in the burden of deductibles was reported across all covered workers.
Additional findings of the report include:
- 56% of firms offered health benefits to at least some of their workers
- 64% of workers were covered at their own firm
- 83% of offering employers say they are satisfied with the overall choice of providers available through their insurance plans
- 67% of offering employers say they are satisfied with their mental health and substance abuse networks
- 19% of employers describe their mental health networks as somewhat or very narrow, signaling a gap in availability of behavioral health services
Speaking on the implications of the pandemic, particularly its impact on mental health, lead study author Gary Claxton, a KFF senior vice president and director of the Health Care Marketplace Project, notes in a statement, “Some plans have been able to increase access by supporting telehealth, though it’s unclear whether such options will become a permanent feature.”
In concluding, authors of the Health Affairs article highlight the rising prevalence of mental health issues and the subsequent need to address these concerns. “As the pandemic and accompanying economic uncertainty continue to take a toll on the well-being of workers and their families, increased access to mental and behavioral health services will likely become an ongoing issue for employers and society more generally.”
With nearly 157 million Americans relying on employer-sponsored coverage, next year’s survey will provide the first full look at how the pandemic may have affected workers’ health benefits. Moreover, the upcoming election may have a significant influence on projections, particularly the fate of the Affordable Care Act (ACA). While the Democratic party seeks to protect and build upon the ACA, the Trump administration’s pursuit of its repeal, without a concrete plan in place, could impact coverage of health care costs for employers and their respective workforce.
Claxton G, Damico A, Rae M, Young G, McDermott D, Whitmore H. Health benefits In 2020: premiums in employer-sponsored plans grow 4 percent; employers consider responses to pandemic. Health Aff. Published online October 8, 2020. doi:10.1377/hlthaff.2020.01569