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Employer-Sponsored Health Insurance Cost Rose 4% in 2020

Analysis  |  By John Commins  
   October 08, 2020

A Kaiser Family Foundation study shows that the growing cost of health insurance for employees continues to outstrip wage growth.

Family premiums for employer-sponsored health insurance averaged $21,342 this year, a 4% increase that outpaced wage growth, according to the 2020 benchmark KFF Employer Health Benefits Survey.

Workers this year contributed an average of $5,588 to the cost of family coverage, with employers paying the rest, and that the average annual premium for single coverage rose 4%, to $7,470, according to the survey, which polled 1,765 public and private companies from January to July.

"Conducted partly before the pandemic, our survey shows the burden of health costs on workers remains high, though not getting dramatically worse," Kaiser Family Foundation President and CEO Drew Altman said in a media release.

"Things may look different moving forward as employers grapple with the economic and health upheaval sparked by the pandemic," Altman said.

Employer-sponsored health insurance covers about 157 million nonelderly people and is the largest source of health insurance in the United States.

Annual premium growth continues to outpace the year-to-year wage growth (3.4%) and is close to double the rate of inflation (2.1%), as measured by the Gross Domestic Product.

Since 2010, average family premiums have increased 55%, at least twice as fast as wages (27%) and inflation (19%), KFF said.

More than 8-in-10 covered employees (83%) have a deductible in their plan, up from 70% a decade ago. The average single deductible stands at $1,644, slightly down from last year's $1,655 average but up sharply from the $917 average of a decade ago.

These two trends result in a 111% increase in the burden of deductibles across all covered workers, KFF said.

Despite the dramatic cost growth and skimpier coverage, 83% of employers said they are satisfied with the choice of providers in their insurance plans, though 67% said the same about their mental health and substance abuse networks.

About 19% describe their mental health networks as somewhat or very narrow, potentially leaving workers with limited options at a time when worry and stress related to the pandemic is affecting many working Americans.

“Conducted partly before the pandemic, our survey shows the burden of health costs on workers remains high, though not getting dramatically worse.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


56% of employers offer health benefits, largely unchanged over the past five years.

About half (53%) of firms with fewer than 50 workers and nearly all (99%) firms with at least 200 or more workers offer coverage.

Virtually all covered workers are in plans with a limit on in-network cost sharing (called an out-of-pocket maximum) for single coverage. 

Most large firms (81%) offer at least one type of wellness or health promotion program.

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