KFF Releases Results of Employer Health Benefits Survey

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Many non-elderly individuals in the United States find themselves on employer-sponsored insurance—154 million to be precise¹—making it quite prevalent. As a result, KFF conducts a yearly survey featuring both private and non-federal public employers (three or more workers) in order to deliver the latest in the sector employer-sponsored health benefits, which has continued to gain popularity.

Its 2024 edition¹ (and 26^th overall) featured a variety of noteworthy findings, some of which will be elaborated on below.

Average annual premiums, contributions

When it comes to the average annual premiums for employer-sponsored health insurance in this year, the totals shaped out to $8,951 and $25,572 for single coverage and family coverage respectively, which were also a reflection of 6% and 7% rises in premiums over 2023, and rises of 24% and 28% over the past five years.

However, it’s important to keep in mind that employee wages rose by 4.5%, while inflation grew by 3.2%.

Also, if one were to analyze the average premiums for small and large firms, they end up being similar for both covered workers with single coverage ($9,131 vs. $8,884) and family coverage ($25,167 vs. $25,719). If examining high-deductible health plans with a savings option (HDHP/SO), the average premiums for covered workers are actually less than the general average premiums for single coverage ($8,275) and family coverage ($24,196). As for those enrolled in PPOs, the average premiums are greater than the average premiums for single ($9,383) and family coverage ($26,678).

Selecting a plan

As in previous years, PPOs are still the most popular type of plan, with 48% of covered workers being enrolled in one, while 27% signed up for a high-deductible plan with a savings option (HDHP/SO), 13% for an HMO, 11% for a POS plan, and 1% for a conventional or indemnity plan, representing a similar distribution in past years.

The popularity of self-funded health plans, and the value of cost sharing

Depending on the size of the company, some firms tend to go with self-funded health plans, especially if they’re larger ones. As the term might suggest, health services are paid for via their own funds, as opposed to buying health insurance.

The latest numbers show that 63% of workers are enrolled in self-funded plans with the following breakdown:

• Twenty percent of them work at small firms
• Seventy-nine percent work at larger firms

There are also level-funded plans, which consist of the self-funded side and combine it stop-loss insurance, a move that puts less liability on the employer and more on the insurers. Interestingly enough, says the report, these types of plans have the ability to make waves, due to the fact that health factor plays a major role in underwriting and rating. It also isn’t required for them to offer all of the critical health benefits that other plans may require.

When it comes to cost-sharing, 87% of employees with single coverage generally find themselves with an annual deductible that must be met before specific services are paid for by the plan. In fact, there is an average annual deductible of $1,787 this year, but this amount is commonly higher for those covered employees who work at small firms, compared to those at large ($2,575 versus $1,538).

Overall, this amount for employees who have single coverage and a yearly deductible falls close to the deducible of five years prior ($1,655), but for context, it’s 47% higher than a decade ago, and among all covered workers, almost one-third (32%) of those at smaller firms have an average single deductible of at least $3,000.

“Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage,” said KFF president and CEO Drew Altman in a release.² “In the tight labor market in recent years, they have not been able to continue offloading costs onto workers who are already struggling with healthcare bills.”

References

1. 2024 Employer Health Benefits Survey. KFF. October 9, 2024. Accessed October 14, 2024. https://www.kff.org/health-costs/report/2024-employer-health-benefits-survey/

2. Annual Family Premiums for Employer Coverage Rise 7% to Average $25,572 in 2024, Benchmark Survey Finds, After Also Rising 7% Last Year. KFF. October 9, 2024. Accessed October 14, 2024. https://www.kff.org/health-costs/press-release/annual-family-premiums-for-employer-coverage-rise-7-to-average-25572-in-2024-benchmark-survey-finds-after-also-rising-7-last-year/