Employer Health Benefits Survey Research Articles

Employer-Sponsored Health Insurance Premium Cost Growth and Its Association With Earnings Inequality Among US Families

Costs of employer-sponsored health care benefits have increased faster than workers' wages for several decades, with important implications for disparities in earnings and wage stagnation. To quantify how growth in employer-sponsored health insurance (ESI) premiums may have been associated with reduced annual wages, disparities in earnings by race and ethnicity and wage level, and wage stagnation among US families with ESI. In this economic evaluation, serial cross-sectional analyses were performed of US families receiving ESI from 1988 to 2019 based on data from the Consumer Expenditure Survey, Kaiser Employer Health Benefits Survey, US Census Bureau's Current Population Survey, and federal payroll taxation rates. Statistical analysis was conducted from February 2022 to July 2023. Percentage of annual compensation associated with health care premiums (after accounting for tax deductibility) and lost wages associated with growth in cost of premiums from 1989 to 2019 based on 1988 compensation. To assess disparities, analyses were stratified by race and ethnicity and wage level. In 1988, 44.7 million individuals (head of household: mean [SD] age, 43.3 [13.1] years; 30.1% were female; and 2.4% identified as Asian, 6.2% as Hispanic, 8.6% as non-Hispanic Black, and 82.8% as non-Hispanic White) were covered by ESI family plans; this number remained similar in 2019 at 44.8 million individuals (head of household: mean [SD] age, 47.1 [12.9] years; 41.3% were female; and 1.3% identified as Asian, 9.9% as Hispanic, 9.9% as non-Hispanic Black, and 78.9% as non-Hispanic White). In 1988, the mean (SD) household size was 3.3 (1.3) people, and in 2019, it was 3.4 (1.3) people. If ESI costs had remained at the same proportion of the 1988 average compensation package, then in 2019, the median US family with ESI could have earned $8774 (95% CI, $8354-$9195) more in annual wages. During all 32 years, health care premiums as a percentage of compensation were greater for non-Hispanic Black and Hispanic families than for non-Hispanic White families. By 2019, 13.8% (95% CI, 13.5%-14.1%) of compensation among non-Hispanic White families with ESI went to premium costs compared with 19.2% (95% CI, 18.8%-19.7%) among non-Hispanic Black families and 19.8% (19.3%-20.3%) among Hispanic families with ESI. In 2019, health care premiums as a percentage of compensation at the 95th percentile of earnings for families with ESI were 3.9% (95% CI, 3.8%-4.0%) compared with 28.5% (95% CI, 27.8%-29.2%) at the 20th percentile of earnings. From 1988 to 2019, the mean cumulative lost earnings associated with growth in health care premiums for the median US family with ESI was $125 340 (95% CI, $120 155-$130 525) in 2019 dollars, 4.7% of earnings over the 32-year period. This economic evaluation of US families receiving ESI suggests that 3 decades of increasing health care premiums were likely associated with reduced annual earnings and increased earnings inequality by race and ethnicity and wage level and were meaningfully associated with wage stagnation.

Employers concerned about worker access to MH care

Employers’ responses to Kaiser Family Foundation's (KFF's) 2022 Employer Health Benefits Survey demonstrate the lingering gap in access to behavioral health benefits in employer‐sponsored health plans.

Health Benefits In 2021: Employer Programs Evolving In Response To The COVID-19 Pandemic.

This is the second annual Kaiser Family Foundation Employer Health Benefits Survey released since the beginning of the COVID-19 pandemic. Despite widespread workplace disruption, the key metrics we survey remained fairly stable. Average premiums for single and family coverage each increased 4percent-the same percentage as seen the prior year. The offer rate (59percent) and the coverage rate (62percent) in firms offering coverage were similar to prepandemic levels. Covered workers, on average, contributed 17percent of the cost for single coverage and 28percent of the cost for family coverage-also similar to prepandemic levels. At the same time, the pandemic has spurred changes to employer benefits. Employers expanded telemedicine benefits, and many made modifications to extend the scope of these benefits. Many employers also adapted wellness and biometric screening programs to better align with employees working remotely and with changes in how employees seek out health care.

Health Benefits In 2020: Premiums In Employer-Sponsored Plans Grow 4Percent;Employers Consider Responses To Pandemic.

The annual Kaiser Family Foundation Employer Health Benefits Survey is the benchmark survey of the cost and coverage of employer-sponsored health benefits in the United States. The 2020 survey was designed and largely fielded before the full extent of the coronavirus disease 2019 (COVID-19) pandemic had been felt by employers. Data collection took place from mid-January through July, with half of the interviews being completed in the first three months of the year. Most of the key metrics that we measure-including premiums and cost sharing-reflect employers' decisions made before the full impacts of the pandemic were felt. We found that in 2020 the average annual premium for single coverage rose 4percent, to $7,470, and the average annual premium for family coverage also rose 4percent, to $21,342. Covered workers, on average, contributed 17percent of the cost for single coverage and 27percent of the cost for family coverage. Fifty-six percent of firms offered health benefits to at least some of their workers, and 64percent of workers were covered at their own firm. Many large employers reported having "very broad" provider networks, but many recognized that their largest plan had a narrower network for mental health providers.

Accounting for the burden and redistribution of health care costs: Who uses care and who pays for it.

ObjectiveTo measure the burden of financing health care costs and quantify redistribution among population groups.Data SourcesA synthetic population using data combined from multiple sources, including the Survey of Income and Program Participation (SIPP), Medical Expenditure Panel Survey (MEPS), Kaiser Family Foundation (KFF)/Health Research Educational Trust (HRET) Employer Health Benefits Survey, American Community Survey (ACS), and National Health Expenditure Accounts (NHEA).Study DesignWe estimate two dollar amounts for each individual in the synthetic population: (a) payments to finance health care services, which includes all payments by a household and their employers to finance health care, including premiums, out‐of‐pocket payments, federal and state taxes, and other payments; and (b) the dollar value of health care services received, which equals the amount paid to providers for those services.Data Extraction MethodsWe linked the nationally representative survey data using statistical matching. We allocated health care expenditures from the NHEA to individuals and households based on expenditures reported in the MEPS.Principal FindingsWe show that higher‐income households pay the most to finance health care in dollar amounts, but the burden of payments as a share of income is greater among lower‐income households.ConclusionsAccounting for all sources of payments provides a clear picture of the burden of financing health care costs, and how that burden is spread under our current financing system.

Health Benefits In 2019: Premiums Inch Higher, Employers Respond To Federal Policy.

The annual Kaiser Family Foundation Employer Health Benefits Survey found that in 2019 the average annual premium for single coverage rose 4percent to $7,188, and the average annual premium for family coverage rose 5percent to $20,576. Covered workers contributed 18percent of the cost for single coverage and 30percent of the cost for family coverage, on average, with considerable variation across firms. Fifty-seven percent of firms offered health benefits to at least some of their workers. While some larger firms reported that take-up dropped because of the elimination of the individual mandate penalty, the overall share of workers covered at their own firm (61percent) was similar to that in recent years. Large employers reported taking a variety of steps to address the opioid epidemic over the past few years. Our findings offer some context for the role of health insurance reform in the 2020 election cycle.

Health Benefits In 2018: Modest Growth In Premiums, Higher Worker Contributions At Firms With More Low-Wage Workers.

The annual Henry J. Kaiser Family Foundation Employer Health Benefits Survey found that in 2018 the average annual premium for single coverage rose 3percent to $6,896 and the average annual premium for family coverage rose 5percent to $19,616. Covered workers contributed 18percent of the cost for single coverage and 29percent of the cost for family coverage, on average, with considerable variation across firms. Eighty-five percent of covered workers face a general annual deductible before they use most services, including the 29percent of covered workers who are enrolled in a high-deductible health plan with a savings option. The share of firms covering services provided via telemedicine has increased steadily over the past several years. Nearly a quarter of large employers expect the elimination of the individual mandate to result in lower take-up in plan offerings.

Out of Pocket Costs and Health Insurance Take-Up Rates.

Over the first ten years of this century, the share of the US population covered by employer-sponsored health insurance plans experienced a significant decline. A decrease in the take-up rate accounts for about a quarter of this decline. Usually, the increasing share of the premium that is paid by workers is used to explain the decline in the take-up rate. However, in recent years the increase in copayments, deductible and coinsurance rate has far outpaced the increase in worker contribution. In this study we analyze the impact of out-of-pocket (OOP) costs, which consist of both workers' contribution toward the premium and expected expenditures, on the take-up rate for firms that offer multiple plan types. Using data from the Employer Health Benefits Survey we estimated a pooled ordinary least squares and a fixed effects model. Since we have information about different types of health insurance plans offered by the firm, we derive the cross-price elasticity of coverage. Our fixed effects estimations suggest that workers respond to an increase in the out-of-pocket contributions for Health Maintenance Organization (HMO) plans by switching to PPO plans without impacting the overall take-up rate, while workers respond to increases in the out-of-pocket contribution for Preferred Provider Organization (PPO) plans by switching to HMO plans or dropping out of the group coverage. In general, we found that the estimated elasticities are too small to explain the overall drop in take-up rates even in light of the large increases in required worker contributions and expected expenditures. Still, we highlight the growing importance of expected expenditures in explaining take-up rates.

How Common are Dominated Health Plan Options? Evidence from Employer Health Benefits with High-Deductible Plans

We analyze detailed data on plan designs from the Kaiser Family Foundation Employer Health Benefits Survey for 331 firms that offered employees both a qualifying high-deductible health plan and a lower-deductible option. For an employee at these firms selecting the lower-deductible option will decrease the deductible by $1,300 on average. However, the cost of that additional coverage for the employee, from increased employee premiums and forgone firm contributions to health savings accounts, is nearly as large, averaging $1,100. In 65% of firms the high-deductible option would result in lower maximum possible spending for the employee for the year. Further, we estimate based on simplified plan representations that the high-deductible plan financially dominates the lower-deductible option for employees at roughly half of the firms. Employees facing a range of possible medical-spending distributions would save on average over $500 per year with the high-deductible option, often with no additional annual financial risk. While we cannot pin down the mechanism behind these patterns conclusively, the evidence is consistent with firms passing through lower average costs for high-deductible plans generated by adverse selection patterns to the employees choosing those plans. These results raise questions about the net effect of offering employees choices over plans with different coverage levels. Rather than creating a classic trade-off between risk and expected spending, at many firms plan options generate disparities in overall benefit value for employees who opt into different levels of coverage.

Health Benefits In 2017: Stable Coverage, Workers Faced Considerable Variation In Costs.

The annual Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey found that in 2017, average annual premiums (employer and worker contributions combined) rose 4percent for single coverage, to $6,690, and 3percent for family coverage, to $18,764. Covered workers contributed 18percent of the premium for single coverage and 31percent for family coverage, on average, although there was considerable variation around these averages. For covered workers in small firms, 10percent did not make a premium contribution for family coverage, while 36percent made a contribution of more than half of their premium. The average worker contribution for family coverage has increased from $4,316 in 2012 to $5,714 in 2017. The share of firms that offered health benefits (53percent) and of workers in those firms covered by their employers' plans (62percent) remain statistically unchanged from 2016.

Does Limiting Allowable Rating Variation in the Small Group Health Insurance Market Affect Employer Self-Insurance?

The Affordable Care Act (ACA) imposes adjusted community rating in the small group market, which employers can avoid by self-insuring, raising concerns about adverse selection. We evaluate the impact of limiting allowable rating variation on employer self-insurance across industries with varied health risk, using cross-state variation in pre-ACA rating regulations, the nationally-representative 2008-2013 KFF/HRET Employer Health Benefits survey, and a triple-difference regression approach. We find that lower-risk employers subject to laws limiting allowable premium rating variation have a predicted probability of self-insurance that is about 18 percentage points higher than otherwise-similar higher-risk employers, suggesting that these selection concerns are warranted.

Health Benefits In 2016: Family Premiums Rose Modestly, And Offer Rates Remained Stable.

The annual Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey found that in 2016, average annual premiums (employer and worker contributions combined) were $6,435 for single coverage and $18,142 for family coverage. The family premium in 2016 was 3percent higher than that in 2015. On average, workers contributed 18percent of the premium for single coverage and 30percent for family coverage. The share of firms offering health benefits (56percent) and of workers covered by their employers' plans (62percent) remained statistically unchanged from 2015. Employers continued to offer financial incentives for completing wellness or health promotion activities. Almost three in ten covered workers were enrolled in a high-deductible plan with a savings option-a significant increase from 2014. The 2016 survey included new questions on cost sharing for specialty drugs and on the prevalence of incentives for employees to seek care at alternative settings.

Direct Primary Care: Concierge Care For The Masses.

Direct primary care represents a new model for providers eager to spend more time with fewer patients and bypass insurance headaches.

Health Benefits In 2015: Stable Trends In The Employer Market.

The annual Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey found that in 2015, average annual premiums (employer and worker contributions combined) were $6,251 for single coverage and $17,545 for family coverage. Both premiums rose 4percent from 2014, continuing several years of modest growth. The percentage of firms offering health benefits and the percentage of workers covered by their employers' plans remained statistically unchanged from 2014. Eighty-one percent of covered workers were enrolled in a plan with a general annual deductible. Among those workers, the average deductible for single coverage was $1,318. Half of large employers either offered employees the opportunity or required them to complete biometric screening. Of firms that offer an incentive for completing the screening, 20 percent provide employees with incentives or penalties that are tied to meeting those biometric outcomes. The 2015 survey included new questions on financial incentives to complete wellness programs and meet specified biometric outcomes as well as questions about narrow networks and employers' strategies related to the high-cost plan tax and the employer shared-responsibility provisions of the Affordable Care Act.

How do health insurer market concentration and bargaining power with hospitals affect health insurance premiums?

The US health insurance industry is highly concentrated, and health insurance premiums are high and rising rapidly. Policymakers have focused on the possible link between the two, leading to ACA provisions to increase insurer competition. However, while market power may enable insurers to include higher profit margins in their premiums, it may also result in stronger bargaining leverage with hospitals to negotiate lower payment rates to partially offset these higher premiums. We empirically examine the relationship between employer-sponsored fully-insured health insurance premiums and the level of concentration in local insurer and hospital markets using the nationally-representative 2006–2011 KFF/HRET Employer Health Benefits Survey. We exploit a unique feature of employer-sponsored insurance, in which self-insured employers purchase only administrative services from managed care organizations, to disentangle these different effects on insurer concentration by constructing one concentration measure representing fully-insured plans’ transactions with employers and the other concentration measure representing insurers’ bargaining with hospitals. As expected, we find that premiums are indeed higher for plans sold in markets with higher levels of concentration relevant to insurer transactions with employers, lower for plans in markets with higher levels of insurer concentration relevant to insurer bargaining with hospitals, and higher for plans in markets with higher levels of hospital market concentration.

Health benefits in 2014: stability in premiums and coverage for employer-sponsored plans.

The annual Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey found that in 2014 the average annual premium (employer and worker contributions combined) for single coverage was $6,025, similar to 2013. The premium for family coverage was $16,834--3 percent higher than a year ago. Average deductibles and most other cost-sharing amounts were similar to those in 2013. On average, in 2014 covered workers paid nearly $5,000 per year for family health insurance premiums, and 18 percent of covered workers were in a plan with an annual single coverage deductible of $2,000 or more. Fifty-five percent of employers offered health benefits in 2014, similar to 2013. The Affordable Care Act has not yet led to substantial changes in the employer-based market. However, the next few years could present a different picture as delayed provisions and other changes take effect. This year's survey included new questions on firms' policies related to enrolling spouses and dependents, enrollment in private exchanges, and the use of narrow networks and financial incentives for wellness programs.

Early effects of the San Francisco paid sick leave policy.

We examined employers' responses to San Francisco, California's 2007 Paid Sick Leave Ordinance. We used the 2009 Bay Area Employer Health Benefits Survey to describe sick leave policy changes and the policy's effects on firm (n = 699) operations. The proportion of firms offering paid sick leave in San Francisco grew from 73% in 2006 to 91% in 2009, with large firms (99%) more likely to offer sick leave than are small firms (86%) in 2009. Most firms (57%) did not make any changes to their sick leave policy, although 17% made a major change to sick leave policy to comply with the law. Firms beginning to offer sick leave reported reductions in other benefits (39%), worse profitability (32%), and increases in prices (18%) but better employee morale (17%) and high support for the policy (71%). Many employers (58%) reported some difficulty understanding legal requirements, complying administratively, or reassigning work responsibilities. There was a substantial increase in paid sick leave coverage after the mandate. Employers reported some difficulties in complying with the law but supported the policy overall.

How Might Immunization Rates Change if Cost Sharing is Eliminated?

There is a debate regarding the effect of cost sharing on immunization, particularly as the Affordable Care Act will eliminate cost sharing for recommended vaccines. This study estimates changes in immunization rates and spending associated with extending first-dollar coverage to privately insured children for four childhood vaccines. We used the 2008 National Immunization Survey and peer-reviewed literature to generate estimates of immunization status for each vaccine by age group and insurance type. We used the Truven Health Analytics 2006 MarketScan Commercial Claims and Encounters Database of line-item medical claims to estimate changes in immunization rates that would result from eliminating cost sharing, and we used the Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey to determine the prevalence of coverage for patients with first-dollar coverage, patients who face office visit cost sharing, and patients who face cost sharing for all vaccine cost components. We assumed that once cost sharing is removed, coverage rates in plans that impose cost sharing will rise to the level of plans that do not. We estimate that immunization rates would increase modestly and result in additional direct spending of $26.0 million to insurers/employers. Further, these payers would have an additional $11.0 million in spending associated with eliminating cost sharing for children already receiving immunizations. The effects of eliminating cost sharing for vaccines vary by vaccine. Overall, immunization rates will rise modestly given high insurance coverage for vaccinations, and these increases would be more substantial for those currently facing cost sharing. However, in addition to the removal of cost sharing for immunizations, these findings suggest other strategies to consider to further increase immunization rates.

How Do Employers React to a Pay-or-Play Mandate? Early Evidence from San Francisco

Erratum to http://dx.doi.org/10.2202/1558-9544.1228.

Health Benefits In 2013: Moderate Premium Increases In Employer-Sponsored Plans

Employer-sponsored health insurance premiums rose moderately in 2013, the annual Kaiser Family Foundation/Health Research and Educational Trust (Kaiser/HRET) Employer Health Benefits Survey found. In 2013 single coverage premiums rose 5 percent to $5,884, and family coverage premiums rose 4 percent to $16,351. The percentage of firms offering health benefits (57 percent) was similar to that in 2012, as was the percentage of workers at offering firms who were covered by their firm's health benefits (62 percent). The share of workers with a deductible for single coverage increased significantly from 2012, as did the share of workers in small firms with annual deductibles of $1,000 or more. Most firms (77 percent), including nearly all large employers, continued to offer wellness programs, but relatively few used incentives to encourage employees to participate. More than half of large employers offering health risk appraisals to workers offered financial incentives for completing the appraisal.