The Cost of Family Health Insurance Coverage Reaches All-Time High

ElitePersonalFinance
Last Update: January 12, 2021 Financial News

Through its annual Employer Health Benefits Survey, researchers at the Kaiser Family Foundation (KFF) found that the average cost of family health insurance coverage reached a record $20,576 – up 5% year-over-year. The 2019 survey included responses from 2,012 private and public firms, with 56% of small firms and 99% of large firms offering their employees some form of health insurance coverage.

Family Coverage

Since 2009, average family health insurance premiums have increased by 54%.

At small firms, the average cost is $20,236, while at large ones, the average cost is $20,717. For individuals enrolled in High-deductible Health Plans (HDHP), premiums came in at $18,980 – $1,596 below the overall average. For individuals enrolled in Preferred Provider Organization (PPO) Plans, the average cost was $21,683 – $1,107 above the overall average.

Across the industry, family health insurance costs were lowest for retail employees – at $18,693 – and highest for state and local government employees at $21,819.

Average family premiums at companies where at least 35% of employees earn $25,000 or less in annual income were lower than comparable firms with minimal low-wage workers. The average cost was $17,633 at lower-wage companies versus $20,709 at higher-wage companies.

The average family premiums at companies where at least 35% of employees are 50 or older were higher than comparable firms with a lower percentage of older workers. The average cost was $21,491 for older workforce companies versus $19,807 for younger workforce companies.

Employees at public and private, not-for-profit firms also pay more for family coverage than employees at private for-profit firms. The findings were similar across both family and single coverage plans.

Single Coverage

Single applicants paid an average of $7,188 per year for health insurance coverage, with an average deductible of $1,655. For individuals enrolled in HDHP plans, the average cost was $6,412. For those enrolled in PPO plans, the average cost was $7,675.

However, unlike the family data above, there was plenty of variance by industry.

State and local government employees incurred the highest average health insurance cost at $8,187 annually. Health care was second at $7,480, while transportation, communications, and utilities were third at $7,381. Conversely, retail workers paid the lowest at $6,262 annually, while manufacturing workers paid $6,770 and agriculture, mining, and construction workers paid $6,777.

In-line with the family findings, workers at firms where at least 35% of employees earn $25,000 or less paid an average of $6,189 for single coverage versus $7,233 elsewhere. Likewise, workers at firms where at least 35% of employees are 50 or older paid an average of $6,941 for single coverage versus $7,485 elsewhere.

Premium Variance

KFF researchers also found that 17% of single coverage employees had at least 20% higher premiums than the overall average. In comparison, 19% of employees had premiums that were 80% less than the overall average. For family coverage, 19% of employees had premiums that were at least 20% higher than the overall average, while another 19% of employees had premiums that were 80% less than the overall average.

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