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Employer Based Insurance Costs

By December 26, 2012Commentary

In a detailed analysis of data from its annual health benefit survey, the Kaiser Family Foundation looks at trends in health care premiums and in particular at the relative share of the total cost of coverage born by the employer and the employee.  (KFF Report)   The analysis compared employees in private companies with those at non-profits or working in public jobs.  Consistent with the general perception, those at public employers have a vastly better health care coverage deal.  Reflecting that, 83% of public workers are eligible for benefits, and of those, 90% enroll; compared with 76% and 78% at private employers and 76% and 83% at non-profits.  And 63% of public employers offer retiree benefits compared to 18% at private employers and 23% at non-profit firms.

In both amount and percent, public employees contribute less to the cost of their health coverage, at $3,368 and 23% of the family premium, compared to $4,495 and 30% for private company workers and $4,543 and 27% for those at non-profits.  This despite the fact that public employee premiums are generally substantially higher since the benefit plans are much richer than in the private sector.  Cost-sharing on a service basis is also much higher in the private sector.  Forty-one percent of workers at private firms have a deductible of $1000 or more, compared to 15% of public employees and 26% at non-profits.  Copays and coinsurance are obviously higher as well.  No wonder the general population is unhappy about public employee compensation and benefits.  Given the likely continued continued state budget woes, however, this trend simply cannot last.

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