Employer contributions to health insurance vary widely.
According to the U.S. Census Bureau, 60 percent of Americans get private health insurance through their employers. However, not all plans are the same. They vary widely in rules, coverage levels and costs. Although the law does not require employers to contribute to the cost of employee health insurance premiums, most employers do. Amounts and percentages vary widely. However, the Henry J Kaiser Family Foundation reports that more often than not, employers make significant contributions to employee's health insurance costs.
Averages
In its 2010 survey of employer-sponsored group health insurance, the Kaiser Family Foundation found that employers contributed an average of 82 percent of employee premiums for employee-only coverage and 71 percent for family coverage. This amounted to an average annual contribution of $4,150 for individuals and $9,773 for families.
Premiums
Premiums depend on a number of factors including a company's size, prior insurance utilization and type of plan. Small businesses tend to have fewer options. As a rule, insurance companies either charge small organizations more per employee or offer lower coverage levels on affordable options. Because of the large volume of business they bring and their larger risk pools, big companies typically get better premiums and higher levels of coverage for their employees.
Cost-Sharing
The Kaiser Family Foundation reports that not only do most employees pay a portion of their insurance premiums, but their insurance costs have been rising steadily. Employers have difficulty keeping up with rising insurance costs and aren't able to keep employee costs as low as they used to be. Between 2000 and 2010, insurance premiums rose an average of 115 percent and employee contributions increased 147 percent. Plans cost an average of $6,478 in 2000 and $13,770 in 2010.
Decisions
Employers often face difficult decisions. High premiums can make it difficult to shoulder the majority of costs. That's why small and struggling employers sometimes sponsor group coverage, but defer costs entirely to employees. However, businesses usually try to contribute as much as they can. Each organization has to evaluate the plans available to it and decide what it can afford. Insurance brokers can help businesses examine numerous insurance options and negotiate for the lowest rates possible. As companies grow, they can re-evaluate their health insurance plans and take advantage of their higher head counts to get better deals.
Tags: health insurance, Family Foundation, insurance costs, insurance premiums, Kaiser Family, Kaiser Family Foundation
