Employer Health Benefits Survey Shows Moderate Premium Growth

Oct. 10, 2012

Results of the 14th annual survey on employer-sponsored health benefits by the Kaiser Family Foundation (KFF) and the Health Research and Educational Trust (HRET) show modest increases in the average single (3 percent) and family (4 percent) insurance premiums with little change in the premium contributions and cost sharing by workers compared to the previous year.

The moderate premium growth is attributable to the weak economic recovery and sluggish health care utilization.

The average annual premium for employer-sponsored insurance in 2012 is $5,615 for single coverage and $15,745 for family coverage. On average, covered workers contribute about 18 percent of the premium for single coverage and 28 percent for family coverage, roughly the same percentages as in 2011 and relatively unchanged over the past decade.

The survey (PDF), conducted from January through May of 2012, did reveal that the share of workers covered by a grandfathered health plan decreased significantly from 56 percent in 2011 to 48 percent this year. It also showed that 58 percent of employers offered at least one grandfathered health plan in 2012, compared to 72 percent in 2011.

The drop in grandfathered plans relates to the fact that 27 percent of workers are in plans that were not in effect when The Affordable Care Act was enacted and more than a third of workers were in plans that lost grandfathered status because of changes in deductibles, copayments or employee premium contributions.

The KFF/HRET survey states that PPOs are the more prevalent health plan type, with 56 percent of covered workers enrolled. The percentage of companies offering health benefits to workers is 61 percent in 2012, virtually unchanged from 60 percent in 2011. Almost all employers with 1,000 or more workers offer health coverage to at least some of their employees.

Enrollment in HDHP/SOs (high deductible health plan with savings option) did not increase significantly in 2012 over 2011, but over time it has increased from just 8 percent of covered workers in 2009 to 19 percent today due to rising popularity among smaller employers.