Over half of all Americans receive their healthcare through employer-sponsored health insurance programs. Due to the spiraling costs of healthcare, it’s becoming more difficult to find a plan that maximizes coverage at an affordable price.
When deciding on the right health plan for you, it’s important to consider the average cost of employer health insurance and whether a group plan is the best deal.
Employer-Sponsored Health Insurance Costs
The average employee health insurance cost has increased significantly in recent years. The Kaiser Family Foundation found the average cost of employer-sponsored health coverage is $7,188 for single coverage and $20,576 for family coverage plans.
This sounds high, but it’s important to remember that the employee contribution to health insurance is significantly less because premiums are shared between employer and employee.
Employees can further lessen their costs by contributing to a Health Savings Account (HSA). HSAs enable employees to make tax-free contributions for future medical expenses. They may combine these with high-deductible insurance plans.
Some employer-sponsored plans also come with copayments, which is a required cost paid directly to a healthcare provider by the employee.
However, not all plans come with copayments. This means employees may experience an even lower employer health insurance cost.
Finally, another out-of-pocket cost could be coinsurance. This is the percentage of insurance costs that employees are responsible for after paying their deductibles. For example, a 15% coinsurance means the insurer will pay 85% of every covered medical bill.
How Much Do Employer Health Insurance Plans Cost?
The answer largely depends on the plan chosen by an employer. Average costs differ depending on the type of plan. If we factor in all plans, such as HMO, PPO, and POS, we can take an average for all plans.
The lion’s share of the premiums is typically shouldered by the employer. Let’s take a look at how much health insurance is through employers on average.
Costs for the Business
The average employee health insurance cost depends on whether the plan offers single coverage or full family coverage.
For health plans offering single coverage, employers can expect to pay $5,946 on average. If employee dependents are also covered, this can cost about $14,561 per year.
Costs for the Employee
For the employee, the average employer health insurance cost is significantly lower. For single coverage plans, the average employee contribution is just $1,242. For health insurance offering family coverage, the cost is $6,051.
Factors that Determine Your Employer Health Insurance Costs
Many factors go into determining a business health insurance cost. Employers must take these factors into account when researching different employee health plans.
Average Employee Age: An older workforce will command higher premiums. This is simply because younger people are less likely to make a significant claim for healthcare costs.
Location: Healthcare costs differ by state, as does the general cost of living. However, geographical healthcare costs cannot be determined by the general health of a town, city, or state’s population.
Tobacco Usage: In most states, insurers can add tobacco surcharges for those employees who smoke. There are just a few states that outright ban tobacco surcharges on employer health insurance plans.
Family Size: When family plans are offered, employer health care costs rise as insurers are permitted to increase premiums based on family size. The larger your family, the more you’ll pay under these plans.
Under the terms of the Affordable Care Act (ACA), insurers are not able to factor in the medical histories of enrollees, gender, medical claims history, or the industry the business operates in.
Tips to Lower Your Health Insurance Costs
A big portion of business expenditure goes into covering health insurance premiums. There are several ways to lower the employer cost of healthcare. Some of these methods include:
Shop around: Compare different types of health sharing plans, including ACA plans, level-funded plans, and traditional select plans. It’s worth taking the time to talk to different insurers.
Invest in proactive healthcare: Insurers will lower their premiums if employers are proactive about health. For example, offering group exercise classes and smoking cessation programs are all helpful for lowering premiums.
Start an HRA: A Health Reimbursement Arrangement (HRA) is a tax-advantaged health benefit funded by employers. It reimburses employees who pay out-of-pocket health insurance premiums and expenses.
Look for generic prescription drugs: Rising prescription drug prices contribute a significant amount to health insurance costs. Looking for plans that cover generic prescription drugs can help reduce premiums.
To Sum Up
The average cost of employer health insurance has risen significantly over the course of the 21st century. Companies with more than 50 full-time employees are now required to offer health insurance; it’s only natural that businesses are looking to lower their costs.
Contact Eden Health to learn more about how we can lower your healthcare costs with hybrid collaborative healthcare.
