2020 Employer Health Benefits Survey Summary

Each year, the Kaiser Family Foundation conducts a survey to examine employer-sponsored health benefits trends. Below are the main takeaways from the 2020 survey and how they could affect your organization:

1. Health Insurance Premiums

In 2020, the average premium rose by 4% for both single coverage and family coverage. The average premiums were $7,470 and $21,342, respectively. However, premiums for single coverage under high deductible health plans with a savings option (HDHP/SOs) were noticeably lower than the average single coverage premium. The family coverage average between HDHP/SOs and other plans was largely the same. HDHP/SOs’ annual premiums for single and family coverage were $6,890 and $20,359, respectively.

2. Employer Account Contributions to HDHP/SOs

Employers contribute to high deductible health plans with a savings option through their contributions toward the premium and through their contributions to the savings account option (ie HRA or HSA account). Covered employees enrolled in HDHPs with HRAs on average received an annual employer contribution of $1,276 for single coverage and $2,315 for family coverage

Among employers who did contribute, covered employees enrolled in HSA-qualified HDHPs on average receive an annual employer contribution to their HSA of $741 for single coverage and $1,389 for family coverage. Among covered employees enrolled in an HSA-qualified HDHP, 25% do not receive an account contribution from their employer

3. Employee Contributions

The average employee contribution toward the premium was 17% for single coverage and 27% for family coverage. Employees at organizations with a high percentage of lower-wage employees (where at least 35% make $25,000 or less annually) made above-average contributions toward family coverage—35% vs. 24% when compared to employees at firms with a smaller share of lower-wage employees.

In terms of dollar amounts, employees contributed $1,243 and $5,588 toward their premiums for single coverage and family coverage, respectively. Employees enrolled in HDHP/SOs contributed less on average, paying $1,061 for single coverage and $4,852 for family coverage.

4. Employee Cost Sharing

Most employees pay a share of their health care costs, and the average deductible for all employees was $1,644 in 2020. The average annual deductible has increased by 25% over the past five years and nearly 80% over the past decade, thanks to HDHP/SOs. The percentage of covered employees with a general deductible of $2,000 or greater has increased to 26% in the last five years. Beyond deductibles, most employees cover some portion of the costs from their health care services. For example, 65% of covered employees have coinsurance, and 13% have a copay for hospital admissions.

In addition, nearly all employees are covered by a plan with an out-of-pocket maximum (OOPM), but the costs vary considerably. Among covered employees with single coverage, 11% have an OOPM of less than $2,000, and 18% have an OOPM of $6,000 or more.

5. Health and Wellness Promotion Programs

Wellness programs help employees improve their lifestyles and avoid unhealthy habits. 53% of small employers and 81% of large employers offer at least one wellness program, including smoking cessation, weight management and lifestyle coaching. Of these large employers, 44% offer participation incentives like gift cards or merchandise.

6. Sites of Care

• Telemedicine – Most employers with 50+ employees have embraced telemedicine, with 85% offering health care services through this method. Within the last year, telemedicine offerings have increased significantly, especially among employers with between 50-199 employees.

• Retail Health Clinics – 76% of large firms offering health benefits cover health care services received in retail clinics, such as those located in pharmacies, supermarkets and retail stores.  Clinics often are a lower-cost alternative to office or emergency room visits and are often staffed by nurse practitioners or physician assistants and treat minor illnesses.

7. Self-funding

23% of employees with small employers are enrolled in plans that are either partially or entirely self–funded, compared to 84% of employees with large employers. In the past few years, level-funded plans have become more popular. Level-funded plans are health plans provided by insurers that include a nominally self-funded option for small or mid-sized employers that incorporates stop-loss insurance with relatively low attachment points.

Conclusion

This year continues a period of a stable market, characterized by relatively low-cost growth for employer-sponsored coverage. While premium growth continues to exceed earnings and inflation increases, the differences are moderately small. Additionally, while there have been some changes in terms of employer-sponsored health benefits, no trends have gained significant traction. However, it’s still unclear how the COVID–19 pandemic will affect employer health plans in 2021. Given the economic impact, employers may need to shift more costs to employees than they have in the past. Additionally, any changes after the election and Supreme Court hearing regarding the Affordable Care Act could drastically change employer health plans.

Looking forward, employers should begin to identify tools and resources they can use to offset higher premiums. As costs continue to rise and possible political changes ensue, employers and employees may begin to see increased market movement. Alternatively, employers may look to other funding models to provide competitive health benefits.

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