Human Resources

Workers’ Share of Health Premiums Jumps

Twenty-five percent of covered workers now have annual deductibles of $1,000 or more.

September 20, 2010
KEYWORDS benefits , health , premiums
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Workers are paying nearly $4,000 this year on average toward the cost of family health coverage—an increase of 14%, or $482, above what they paid last year, according to the benchmark 2010 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET).

The jump occurred even though the total premiums for family coverage, including what employers contribute, rose a modest 3% to $13,770 on average in 2010, the survey found. In contrast, the amount employers contribute for family coverage did not increase.

Preferred provider organizations (PPOs) continue to dominate the employer market, enrolling 58% of covered workers. Average PPO family premiums topped $14,000 annually in 2010.

Since 2005, workers’ contributions to premiums have gone up 47%, while overall premiums rose 27%, wages increased 18%, and inflation rose 12%.

Many employers are also increasing the annual deductibles workers must pay before their health plans begin, to share most health-care costs. Some 27% of covered workers now face annual deductibles of at least $1,000, up from 22% in 2009, the survey finds.

Among small firms (three to 199 workers), 46% face such deductibles.

“With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles, and other cost-sharing,” says Kaiser President/CEO Drew Altman. “This may be helping to stem the rapid rise in premiums that we saw in the early 2000s, but it also means employer coverage is less comprehensive. From a consumer perspective, the cost of health insurance just keeps going up faster than wages.”

The recession contributed to the shift in burden to workers. In response to the economic downturn, 30% of employers say they reduced the scope of health benefits or increased cost-sharing, and 23% report increasing the amount employees pay for coverage, the survey finds.

Among other plan types, only consumer-driven plans (which are high-deductible plans that also include tax-preferred savings options such as a health savings account or health reimbursement arrangement) saw growth in their market share. Such plans now enroll 13% of covered workers, up from 8% last year.

“Consumer-driven plans have clearly established a foothold in the employer market, tripling their market share from 4% in 2006 to 13% today,” notes study lead author Gary Claxton, a Kaiser vice president and director of the Healthcare Marketplace Project.

Surprisingly, the survey saw the percentage of firms offering health benefits in 2010 increase sharply to 69% —up from 60% in 2009—largely because of an increase in the offer rate among firms with three to nine workers.

Because most workers are employed by large firms, the shift among the smallest firms did not have a major effect on either the percentage of workers offered health benefits or the percentage of workers covered at their jobs.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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