2014 Employer Health Benefits Survey

Section One: Cost of Health Insurance

The average annual premiums in 2014 are $6,025 for single coverage and $16,834 for family coverage.  The average family premium increased 3% in the last year; the average single premium, however, is similar to the value reported in 2013 ($5,884).  Family premiums have increased 69% since 2004 and have more than doubled since 2002.  However, the average family premium has grown less quickly over the last five years than it did between 2004 and 2009 or between 1999 and 2004.  Average family premiums for workers in small firms (3-199 workers) ($15,849) are significantly lower than average family premiums for workers in larger firms (200 or more workers) ($17,265).

Premium Costs for Single and Family Coverage

• The average premium for single coverage in 2014 is $502 per month, or $6,025 per year (Exhibit 1.1). The average premium for family coverage is $1,403 per month or $16,834 per year (Exhibit 1.1).
• The average annual premiums for covered workers in HDHP/SOs are lower for single ($5,299) and family coverage ($15,401) than the overall average premiums for covered workers.  Average annual premiums for all other plan types, including PPOs, HMOs, and POS plans, are similar to the overall average premiums for covered workers (Exhibit 1.1).
• The average annual premium for family coverage for covered workers in small firms (3-199 workers) ($15,849) is lower than the average premium for covered workers in large firms (200 or more workers) ($17,265) (Exhibit 1.2). The average annual single premium for covered workers in small firms (3-199 workers) also is significantly lower than for workers in larger firms ($5,788 vs. $6,130).
• Average single and family premiums for covered workers are higher in the Northeast ($6,369 and $17,772) and lower in the South ($5,720 and $16,170) than the average premiums for covered workers in all other regions (Exhibit 1.3).
• Average single and family premiums for covered workers in the Wholesale ($5,189 and $15,599) and Retail ($5,355 and $14,979) industries are lower than the average premiums for covered workers in all other industries (Exhibit 1.4).
• Covered workers in firms where 35% or more of the workers are age 26 or younger have lower average single and family premiums ($5,292 and $15,182) than covered workers in firms where a lower percentage of workers are age 26 or younger ($6,079 and $16,955).  Covered workers in firms where 35% or more of the workers are age 50 or older have higher average single and family premiums ($6,313 and $17,425) than covered workers in firms where a lower percentage of workers are age 50 or older ($5,759 and $16,286) (Exhibit 1.5) and (Exhibit 1.6).
• Covered workers in firms with a large percentage of lower-wage workers (at least 35% of workers earn $23,000 per year or less) have lower average single and family premiums ($5,175 and $14,177) than covered workers in firms with a smaller percentage of lower-wage workers ($6,093 and $17,044). Covered worker in firms with a large percentage of higher-wage workers (at least 35% of workers earn $57,000 per year or more) have higher average single and family premiums ($6,244 and $17,582) than covered workers in firms with a smaller percentage of higher-wage workers ($5,819 and $16,124) (Exhibit 1.5) and (Exhibit 1.6).
• There is considerable variation in premiums for both single and family coverage.
  • Twenty percent of covered workers are employed by firms that have a single premium at least 20% higher than the average single premium, while 21% of covered workers are in firms that have a single premium less than 80% of the average single premium (Exhibit 1.7) and (Exhibit 1.8).
  • For family coverage, 20% of covered workers are employed in a firm that has a family premium at least 20% higher than the average family premium, and another 20% of covered workers are in firms that have a family premium less than 80% of the average family premium (Exhibit 1.7) and (Exhibit 1.8).

Premium Changes Over Time

• The average premiums for covered workers in2014 are $6,025 annually, or $502 per month, for single coverage and $16,834 annually, or $1,403 per month, for family coverage. The 2014 average single premium is similar to the 2013 average premium (the 2 percent increase is not significant). However, the 2014 average family premium is 3 percent higher than the 2013 average premium (Exhibit 1.11).
  • The $16,834 average annual family premium in 2014 is 26% higher than the average family premium in 2009 and 69% higher than the average family premium in 2004 (Exhibit 1.11). The 26% premium growth seen in the last five years (2009 to 2014) is significantly lower than the 34% premium growth seen in the previous five year period, from 2004 to 2009 (Exhibit 1.16).
  • Premiums for both small and large firms have seen a similar increase since 2009 (25% for small and 26% for large). For small firms (3 to 199 workers), the average family premium rose from $12,696 in 2009 to $15,849 in 2014. For large firms (200 or more workers), the average family premium rose from $13,704 in 2009 to $17,265 in 2014 (Exhibit 1.13).
  • Since 2004, premiums for small firms (3 to 199 workers) have increased 63% ($15,849 in 2014 vs. $9,737 in 2004). The premiums for large firms have increased 72% ($17,265 in 2014 vs. $10,046 in 2004) (Exhibit 1.13).
  • Average family premiums for firms with fewer low-wage workers (less than 35% of workers earn $23,000 per year or less) grew in the last year ($17,044 vs. $16,450), while premiums for family coverage for firms with many low-wage workers were similar to 2013 ($14,177 vs. $15,225) (Exhibit 1.15). Overall, premiums for family coverage have grown faster for firms with fewer low-wage workers than firms with many low-wage workers over the last year (4% vs. -7%), as well as the last five years (27% vs. 9%).  A similar pattern is observed for single coverage, where average premiums have grown faster for firms with fewer lower-wage workers than firms with many lower wage workers over the last five years (26% vs. 12%).
• For large firms (200 or more workers), the average family premium for covered workers in firms that are fully insured has grown at a similar rate to premiums for workers in fully or partially self-funded firms from 2009 to 2014 (26% in both fully insured and self-funded firms) and from 2004 to 2014 (71% in fully insured firms vs. 73% in self-funded firms) (Exhibit 1.17).