Premiums for Employer-based Health Insurance Increased by 7% in 2024, says KFF report

Premiums for employer-sponsored health insurance for families rose 7% again this year, matching the 7% increase in 2023, according to the results of KFF’s Employer Health Benefits Survey published today. Premiums for single coverage increased by 6% this year, the report said.

From last year to this year, wages increased 4.5% and inflation, 3.2%, so the hike in health premium hike was considerable higher, according the KFF.

But over the past five years, premiums have increased 24%, an increase comparable to the rate of inflation (23%) and wage growth (24%), KFF’s 220-page report presenting its survey results noted.

The good news for employees is that the survey shows that the share of the premium that employees pay has risen by just 5% over the past five years — or by less than $300. The report said the tight labor market may help explain the relative modest increase for workers in premium costs.

In the 2024, the average employee share of the premium came to $1,368 for single coverage and $6,296 for family coverage, which the KFF report said was similar to last year. On a percentage basis, that works out to 16% of the premium for single coverage and 25% of the premium for family coverage, lower than the percentages contributed in 2023.

For employees who use healthcare, deductibles, copays and coinsurance can offset relatively modest growth in premium costs. The KFF survey found that In 2024, 32% of covered workers are in a plan with a general annual deductible of $2,000 or more for single coverage. The proportion ofcovered workers with a general annual deductible of $2,000 or more for single coverage has grown over the past ten years, from 18% to 32%, according to KFF.

Coverage of glucagon-like peptide 1 agonists, such as Wegovy (semaglutide) and Zepbound (tirzepatide), is a fraught issue for employers balancing the added cost with the benefit that employees with obesity might experience. The KFF survey found just 18% of large employees (those with 200 or more employees) covered GLP-1s and of those that didn’t, 62% indicated that they weren’t likely to in the next 12 months. Of those that coveredthe weight loss drugs, 53% did so withs type of condition or requirement, such as a requirement to meet with a dietitian, psychologist, case worker, or therapist.

The KFF researchers also asked about abortion coverage. Among firms with 200 or more employees offering health benefits, 29% said that legally provided abortions are covered in most or all circumstances; 18% said that legally provided abortions are covered only under limited circumstances, such as rape, incest, or health or life endangerment of the pregnant enrollee; and 8% said that legally provided abortions are not covered under any circumstance. But there is a large gap in the KFF findings because nearly half (45%) of responding firms indicated that they didn’t know the answer to the question.

The KFF report on employer-based health insurance and benefits is widely cited and considered perhaps the most reliable source of information on employer and employee healthcare costs and premiums. This year it is based on interviews with 2,142 randomly selected nonfederal public and private employers with three or more workers. Davis Research LLC, a California survey research firm, conducted the field work between January and July 2024.