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Cost of Employer Provided Healthcare

The average cost of employer health coverage for a family this year is about $22,000, a figure similar to last year’s total, according to a new survey that shows upward pressure on healthcare costs hasn’t yet broadly translated into higher premiums.

That will likely change next year, as insurers renegotiate contracts with hospitals and other medical providers that are seeking higher reimbursements to cover their own rising expenses for labor and other supplies.

UnitedHealth Group Inc. and Elevance Health Inc., parents of large health insurers, said on earnings calls earlier this month that they were seeing inflationary trends and taking steps to price coverage accordingly.

Premiums for many individual and small-business plans are also expected to rise sharply next year.

For 2022, annual premiums for an employer-provided family plan were $22,463, which wasn’t a statistically significant change from $22,221 last year, according to an annual survey of employers by the nonprofit Kaiser Family Foundation.

Employees paid $6,106 of the total this year, with the rest of the cost borne by the employers, according to the Kaiser survey. The amount of the employee contribution was $5,969 in 2021.

The average cost of an employer health plan for an individual for 2022 was $7,911, compared with $7,739 last year.

The Kaiser survey found that employers, grappling with a tight labor market in many fields but relatively steady premiums, held off on significantly raising out-of-pocket charges known as deductibles, which people must pay toward most care before a health plan begins covering expenses.

The average 2022 general deductible for individual-worker coverage was $1,562, compared with $1,434 last year, which wasn’t a statistically significant change.

Gary Claxton, a senior vice president at the Kaiser Family Foundation, said insurers probably kept premiums flat for many 2022 plans because they had to lock in rates in the fall of 2021, when the extent of inflation wasn’t clear.

“It just didn’t get priced in in 2022,” he said. “I expect that will change next year.”

For 2023, there could be relatively sharp increases in premiums, he said, as the rising cost of labor and supplies is reflected in higher prices for medical services. Hospitals have said they plan to seek higher prices.

Insurers have said healthcare costs tied to Covid-19 have generally fallen off. Some impacts from the pandemic’s peak remain, however, including increased access to telemedicine and higher demand for mental- and behavioral-health resources.

The Kaiser survey found that 14% of employers were very satisfied and 54% were satisfied with access to behavioral healthcare in their plans.

The survey was conducted between February and July 2022 and drew responses from 2,188 employers.




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