Workers and their employers are grappling with higher costs for job-based health insurance this year. According to the recently released KFF’s Employer Health Benefits Survey, the average cost of family health insurance coverage at work has surged to nearly $24,000, marking a 7% increase from the previous year.
Employees are feeling the impact as well, with their share of the premium rising to an average of $6,575, an increase of nearly 8% compared to the prior year. Their companies bear the remaining expenses.
Matthew Rae, co-author of the survey, acknowledged the significant premium increase, stating, “There are lots of affordability challenges for employer coverage.”
For single coverage, the average annual premium now stands at $8,435, representing a 7% increase from the previous year. Workers are contributing slightly over $1,400, approximately $75 more than in the previous year.
It’s worth noting that while these premium increases are substantial, they are in line with the growth in wages and inflation since 2022 and over the past five years, according to KFF. This differs from the early 2000s when premiums were soaring by double digits, while inflation and wage growth remained relatively subdued.
The tight job market has played a role in companies maintaining robust health insurance coverage as a tool for recruitment and retention.
Deductibles have remained relatively stable, possibly reflecting employers’ concerns about the financial burden on workers when they require medical care. Workers with a deductible for single coverage face an average annual deductible of about $1,735.
However, workers should prepare for an even greater impact on their paychecks in the coming years, as nearly a quarter of companies indicated they would increase employees’ premium contributions in the next two years.
In general, workers at smaller firms often face higher health insurance costs compared to their counterparts at larger companies with at least 200 employees.
The Supreme Court’s 2022 decision, which limited federal constitutional abortion rights, has also impacted health insurance offerings. Large employers with employees in multiple states may encounter challenges providing abortion coverage due to various state laws that restrict or prohibit abortion access.
The survey revealed that one in 10 large firms with at least 200 employees does not cover legal abortions in their largest plan. Another 18% provide coverage only under limited circumstances, such as rape, incest, or health or life endangerment.
In response to the Supreme Court ruling, some companies are offering financial assistance to employees who need to travel to other states for abortions. Approximately 7% of large employers, and 19% of companies with at least 5,000 workers, currently provide or plan to provide such reimbursement.