Annual Kaiser Report on Employer-Based Health Care Coverage, Part 1

The Kaiser Family Foundation conducts an annual survey regarding employment-based health care coverage.  This year’s report covers responses from about 2050 companies, of all sizes and across the country.  (KFF Report)   The headline numbers relate to the average cost of a health plan.  For 2014, single coverage averaged $6025 per year and family coverage $16,834.  These were modest increases of 2% and 3%.  But in the ten years from 2004 to 2014, premiums rose 69% and the worker’s share of the premium rose 81%.  Overall premiums and the worker’s share have greatly outpaced both general inflation and wage gains over this time.  There is substantial variation around these averages.  For example, 20% of employees are covered by plans with a family premium of at least $20,200 and 20% are in plans with a family premium of less that $13,467.  Plan type obviously contributes to premium rates.  High-deductible/HSA plans have the lowest premiums, with an average of $5,300 for single coverage and $15,401 for family.  PPO plans have the highest average cost.  PPO plans enroll 58% of employees, with 20% being in high-deductible type plans and 13% in pure HMO designs.  High-deductible plan enrollment has plateaued in the last couple of years, although other evidence suggests that an increasing number of companies are offering such a plan as at least one option.

On average across all plan types, the employee is paying 18% of the single plan premium and 29% of the cost of family coverage.  Workers in firms with 3 to 199 employees pay a lower average percent for single coverage but a higher average percent for family coverage than do workers in larger companies.  In companies with more low-wage workers, employees tend to contribute a higher share of the premium.  In dollar terms, the average contribution is $1081 for single and $4823 for family coverage.  Please note that this is before any cost-sharing under the plan.  And cost-sharing continues to grow, with 80% of employees now having a general deductible, with an average annual amount of $1,217 for single coverage, up from $826 in 2009.  The average deductible in smaller firms, however, is $1797, which explains why the premium is lower for single coverage in these firms.  Even though they may not be called high-deductible plans, because they aren’t coupled with a savings account, most plans have what the general public would consider to be pretty large deductibles.  Over 70% of employees also have a fixed dollar copayment for physician office visits and around another 20% pay coinsurance for such services.  Average copay amounts are $24 for primary care and $36 for specialty visits.  Prescription drugs tend to have complex copayments by tier, with generics or favored drugs having a first-tier copay averaging $11, second-tier drugs $31, third-tier drugs $53 and fourth-tier $83.  There tends to be significant cost-sharing for inpatient hospital and other services as well.  More tomorrow.