The latest survey by the Kaiser Family Foundation (KFF) concerning employer-sponsored health benefits found modest increases in employers’ and employees’ costs in 2022.
In its 24th Employer Health Benefits Survey (EHBS), KFF found the average annual premiums for employer-sponsored health insurance in 2022 were $7,911 for single coverage and $22,463 for family coverage. These amounts were up from $7,739 and $22,221 in the previous year, respectively – an increase of $172.00 for single coverage and $242.00 for family coverage. The average family coverage premium is up 20% over the past five years and up 43% during the past 10 years.
Small vs. Large Employers
In 2022, workers insured through their employers at both small and large firms had similar premiums. For single coverage, the premium was $8,012 for employees at small firms as compared to $7,873 for those working at large firms. For employees with family coverage, the premium was $22,186 at small firms, compared to $22,564 at large firms.
HDHP vs. Other Coverage
Employees enrolled in High Deductible Health Plans (HDHPs) had lower premiums, overall, whether enrolled in single or family coverage. Single coverage enrollees had average premiums of $7,288, as compared to $21,136 for family coverage. PPO participants had the highest average premiums: $8,272 for single coverage, and $23,426 for family coverage. For all plans, the premium average was $7,911 for single coverage and $22,463 for family coverage.
Most employees do make a contribution toward their insurance costs. Covered workers, on average, contribute 17% of the premium for single coverage and 28% of the premium for family coverage. These numbers are similar to those reported by KFF in its EHBS in 2021.
The average contribution for workers at small firms is $7,556, which is more than a third higher than the average for those at large firms ($5,580). Workers at private, for-profit firms contribute a higher percentage of the premium versus those at public firms, regardless of coverage type.
A fortunate one-third of employees (33%) at small firms are enrolled in coverage where the employer pays the full premium for single coverage. That compares to just six percent of workers at large firms. Nearly one-third of insured employees at small firms (31%) must pay more than half of their family premium coverage. That compares to just seven percent of workers at large firms.
Nine percent of covered employees, including more than one-fifth (21%) at small firms are in enrolled in a plan with the worker contributing $12,000 or more toward the cost of their family coverage.
Preferred Provider Organization plans remain the most common plan type. Nearly half (49%) of insured employees enrolled in a PPO in 2022. That compares to 29% enrolled in an HDHP, 12% enrolled in an HMO, nine percent in a Point-of-Service (POS) plan, and one percent in a conventional (indemnity) plan.
Self-Funding Popular – Especially for Large Firms
Many larger firms self-fund their health plans or pay for some workers’ health services directly – rather than through the use of health insurance. Nearly two-thirds (65%) of covered workers are in self-funded plans. That includes 20% of workers at small firms and 82% at large firms.
Deductibles for Most
Most employees with health insurance have a cost share before their insurance begins to pay benefits. Among those with single coverage, the average annual deductible is $1,763, similar to the $1,669 average in 2021. For most plan types, the single coverage deductible is higher for employees at small firms. The average is $2,543 for PPO enrollees at small firms, as compared to $1,493 for workers at large firms.
The average general deductible is up 17% over the past five years – and up 61% during the past 10 years – for single coverage enrollees.
Managing Health Costs in 2023
Multiple industry and benefits sources are predicting health insurance premium increases in the range of five to eight percent for 2023. An analysis by Aon is forecasting a 6.5% increase. The Society for Human Resource Management (SHRM) is expecting a bump of 5.6%, based on a prediction by Mercer. The International Foundation of Employee Benefit Plans says employers are anticipating a 7.5% increase. The country’s oldest actuarial consulting firm, Buck, has forecast an increase in the range 5.8% to 6.9%.
Word & Brown will continue to report on industry trends and forecasts. We encourage you to stay up to date by regularly visiting our Newsroom, or signing up for our J&R Report e-newsletter.
To get a quote comparing 2023 plan options for your clients, contact your Word & Brown representative – or login to run a quote on your own. If you’re not already working with us, you can register using our online form.