News & Tips • Employee Benefits: What Does the Average Employer Spend?

Employer vs Employee Contributions to Health Insurance

The Annual Kaiser Family Foundation (KFF) Health Benefits Survey summarizes data from employers across the country in an annual report to aid in research and development. Here is the breakdown for employer versus employee contributions to health insurance from 2016-2017:

In terms of medical compensation costs, state and local governments tended to spend more on their employee benefits than the public or private sector. The lowest rate of compensation among government workers is in hospitals at 11.1%. Comparatively, the rate of coverage in the service industry sits at 6.9%. Medical benefits are nearly ubiquitous in employee benefits package negotiations and the vast majority of companies and private firms (67% and 70% respectively) offered their employees medical insurance in 2016. Increasingly, they dominate employee/employer relationships.

According to the Kaiser Family Foundation’s 2016 Employer Health Benefits Survey, employers covered an average of 82% of premium costs for those enrolling in individual coverage. Workers in small firms are likely to pay higher rates for family coverage, with an average employee contribution of 39%.

A complete picture of the cost of employee benefits ought to include premiums, copays, voluntary benefits, workers compensation, network access, administrative costs, and performance guarantees. Providing such benefits can keep you competitive against those with whom you compete to hire the best employees.

Data Courtesy of the KFF: https://www.kff.org/health-costs/report/2016-employer-health-benefits-survey/

French, Michael T., et al. “Key Provisions of the Patient Protection and Affordable Care Act (ACA): A Systematic Review and Presentation of Early Research Findings.” Health Services Research, vol. 51, no. 5, Oct. 2016, pp. 1735–71. DOI.org (Crossref), https://doi.org/10.1111/1475-6773.12511.

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