How affordability of employer coverage varies by family income

The cost of employer sponsored health insurance—including premiums, deductibles, and other out-of-pocket costs—has risen steadily over time. Few employer plans (just 7% of firms with 50 or more workers in 2020) have programs to help lower-wage workers meet cost-sharing obligations.

Low-income workers offered health insurance through their employer are typically not eligible for subsidies on the Affordable Care Act Marketplaces, even if they would face lower costs to buy coverage and with reduced cost sharing. While many employers pay a significant portion of health insurance premiums, some workers face relatively high contributions to enroll in coverage, particularly when enrolling dependents.

In this brief, we analyze the Current Population Survey to look at the share of family income people with employer-based coverage pay toward their premiums and out-of-pocket payments for medical care. We specifically look at people in working families, limiting the analysis to non-elderly people living with one or more family members who are full-time workers and have employer-based coverage.

We find that people in lower-income families with employer coverage spend a greater share of their income on health costs than those with higher incomes, and that the health status of family members is associated with higher health-related expenses.

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