Each year, the Kaiser Family Foundation conducts a survey to examine employer-sponsored health benefits trends. On October 8, 2020, Kaiser released this year’s survey results – the following notes summarize the main points of the 2020 survey:
Worker Contributions – The average worker contribution toward the premium (payroll deduction) was 17% of the total premium for single coverage and 27% for family coverage. Employees at organizations with a high percentage of lower-wage workers (where at least 35% make $25,000 or less annually) made above-average contributions toward family coverage—35% vs. 24% when compared to employees at firms with a smaller share of lower-wage workers. In terms of dollar amounts, workers contributed $1,243 and $5,588 per year toward their premiums for single coverage and family coverage, respectively.
Plan Enrollment – The following were the most common plan types in 2020:
- Preferred provider organizations (PPOs)—47% of workers covered
- High deductible health plans (HDHPs)—31% of workers covered
- Health maintenance organizations (HMOs)—13% of workers covered
- Point-of-service (POS) plans—8% of workers covered
Employee Cost Sharing – Most workers pay a share of their health care costs following a surgery or procedure, and the average deductible for all workers was $1,644 in 2020. The average annual deductible has increased by 25% over the past five years and nearly 80% over the past decade. The prevalence of HDHPs has contributed to the increase of deductible amounts. The percentage of covered workers with a general deductible of $2,000 or greater has increased to 26% in the last five years.
Conclusion – it’s still unclear how the COVID-19 pandemic will affect employer health plans in 2021. Given the economic impact, employers may need to shift more costs to employees than they have in the past. Alternatively, employers may look to other funding models to provide competitive health benefits. What’s more, 2020 is an election year, and a Supreme Court case regarding the Affordable Care Act is scheduled for around the same period. Both of these events could significantly impact employer health plans in unforeseen ways.
Looking forward, employers should begin to identify tools and resources they can use to offset higher premiums. As costs continue to rise and possible political changes ensue, employers and employees may begin to see increased market movement.
Within the next several days, Employco will release its 2021 benefit plan portfolio including new monthly premiums. If you are not currently utilizing Employco’s master benefit plans and are interested in learning more about our program, please contact us for more information.