The annual cost of family health insurance coverage at work has risen to an average of nearly $24,000 this year, marking a 7% increase from the previous year, according to the KFF’s Employer Health Benefits Survey. Employees are contributing an average of $6,575 towards their share of the premium, which is almost $500 or close to 8% more than last year. The remaining cost is covered by their employers, writes CNN.
For single coverage, the average annual premium has also increased by 7% from last year, reaching $8,435. Workers are contributing just over $1,400 towards this, which is about $75 more than last year.
Despite the significant increase in premiums, it aligns with the rise in wages and inflation since 2022 and over the past five years. This is a contrast to the early 2000s when premiums were increasing by double digits, but inflation and wage growth were relatively low.
Employers are hesitant to reduce their health insurance coverage due to the tight job market, as it serves as a recruitment and retention tool. Deductibles have remained essentially flat this year, possibly reflecting employers’ concerns about the amount workers have to pay when they need medical care. The average annual deductible is roughly $1,735 among workers who have a deductible for single coverage.
However, workers should prepare for premiums to take a larger portion of their paychecks in the coming years. Nearly a quarter of companies have stated they will increase employees’ premium contributions in the next two years.
Workers at smaller firms typically pay much more for coverage than their peers at larger companies. For instance, KDC Mailing & Bindery, a small firm in Tempe, Arizona, faced an overall premium increase of about 13% this year. The company raised workers’ premiums by 3% but had to increase its prices by as much as 5% to afford the increased cost.