Premiums for Employer-Sponsored Coverage Increase Modestly, but Lower-Income Workers Pay More

By Martha Heberlein

The annual Kaiser Family Foundation/Health Research and Educational Trust survey of employer health benefits was released today and found that the average premium for family based coverage rose to $15,745, or just 4% compared to 2011 (premiums for individual plans rose 3%).

Although moderate, this growth has far out-paced workers wages, which rose just 1.7% in the last year. The longer-term trend is even more troubling – since 2002, premiums have risen 97% (with some years seeing double-digit increases), as wages rose just 33%. While the share of the cost that families are expected to cover has remained relatively constant over the last decade (at about 28%), for workers whose wages have remained relatively stagnant, the increased cost of health coverage requires them to dig deeper into their pockets.

Even more concerning are the significant differences in the benefits and family contributions for firms with more low-wage workers (at least 35% of the workforce earns $24,000 or less). These workers pay, on average, $1,000 more every year for family coverage than those at higher-wage firms, despite the fact that these firms are paying less in total premiums ($14,694 vs. $16,427).

Additionally, those working for low-wage firms are more likely to face high deductibles – 44% face a deductible of at least $1,000 compared to 29% of those at high-wage firms. So not only are lower-income families facing greater entry fees into coverage than their higher-wage counterparts, once they’ve purchased a plan, it’s less comprehensive.