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Cost of Employer Health Plans Varies Widely by State
 

By Stephen Miller, CEBS  10/12/2011
 

In 2011, Alaska had the highest average annual cost per employee in the U.S. for employer-sponsored health plan coverage, at $11,926. Mississippi had the lowest per employee cost, at $6,282, according to United Benefit Advisors’ (UBA) 2011 UBA Health Plan Survey, a benchmarking survey of 16,421 plans from 10,744 employers. The average annual cost for individual employee coverage in all plans nationally in 2011, according to UBA, was $8,688.

“These are important benchmarks for employers looking to expand into various states and the potential impact on overall human resource costs," said Bill Stafford, vice president for member services at UBA, an alliance of more than 140 independent benefit advisory firms. "This may also have a bearing on the various future policies states adopt in responding to health care reform in their local market,” he added.

Aside from Alaska, all states with an average annual cost per employee in excess of $10,500 are in the Northeast:

The five most expensive states for employer-provided health coverage in 2011:

State

Average Annual Cost per Employee

Alaska

$11,926

New York

$11,308

Massachusetts

$11,004

Connecticut

$11,000

New Jersey

$10,642

Source: 2011 UBA Health Plan Survey.

In 2011, Mississippi became the least expensive state for employer-provided coverage, replacing Kentucky, the lowest reported state in UBA's 2010 survey.

The five least expensive states for employer-provided health coverage in 2011:

State

Average Annual Cost per Employee

Mississippi

$6,282

Arkansas

$6,741

Kentucky

$6,801

Idaho

$7,029

Arizona

$7,119

Source: 2011 UBA Health Plan Survey.

The survey was conducted from Oct. 4, 2010, to June 3, 2011, through the efforts of UBA member firms. The state-specific findings were released in October 2011.

In 2012, the average cost of health care coverage per employee in the U.S. is projected to surpass the $10,000 mark for the first time, according to HR consultancy Aon Hewitt (see the SHRM Online article "Per Employee Health Coverage to Cross $10,000 Threshold").

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related Articles:

Employers Accelerate Efforts to Control Health Costs, SHRM Online Benefits Discipline, November 2011

Per Employee Health Coverage to Cross $10,000 Threshold, SHRM Online Benefits Discipline, October 2011

Average Family Health Premiums Top $15,000 in 2011, SHRM Online Benefits Discipline, September 2011

Large U.S. Employers Revamping Health Benefits for 2012, SHRM Online Benefits Discipline, August 2011

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform Resource Page

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