Human Capital & Careers

Health-Benefit Premiums Rise 11 Percent

Survey finds four straight years of double-digit growth.
Stephen TaubSeptember 10, 2004

Employer-sponsored health insurance premiums have increased an average of 11.2 percent this year, according to the 2004 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust (HRET).

To be sure, that’s less than last year’s 13.9 percent increase. But it’s still the fourth straight year of double-digit growth, according to the survey.

Respondents to the sixth annual survey included 3,017 randomly selected public and private firms with three or more employees. The group consisted of 1,925 responding to the full survey and 1,092 answering an added question about offering coverage.

The average premium for family coverage was $9,950 annually, or $829 per month, while single coverage was $3,695 ($308 per month), according to the survey.

Family premiums for preferred provider organizations (PPOs), which cover most of the workers surveyed, rose to $10,217 a year ($851 per month), up from $9,317 in 2003.

Since 2001, premiums for family coverage have risen 59 percent, according to the survey. The study also jibes with other recent surveys that found that fewer workers are being covered by employer-sponsored health plans.

The percentage of all workers receiving health coverage from their employer in 2004 is 61 percent, down from its recent peak of 65 percent in 2001, according to the survey. That works out to at least five million fewer jobs in which health insurance was provided in 2004 than 2001, according to the survey.

Kaiser and HRET attribute the falloff to a decline in the percentage of small employers (three to 199 workers) offering health insurance over this period. For example, in 2004, 63 percent of all small firms offer health benefits to their workers, while 68 percent offered them in 2001.