Average Family Premiums Top $22,000, Up 4% in 2021

​Annual family premiums for employer-sponsored health insurance in the U.S. rose 4 percent for plan year 2021. That's roughly the same rate of increase as from 2019 to 2020, as pandemic-related deferrals of non-emergency health care continued to keep a lid on rising claims costs, according to a survey of nearly 1,700 small and large employers that was conducted during the first half of 2021.

The Kaiser Family Foundation's (KFF's) 2021 Employer Health Benefits Survey shows that annual premiums for employer-sponsored family health coverage reached $22,221 this year.

On average, workers contributed $5,969 toward the cost of family coverage in 2021, with employers paying the rest, the survey found, which means employees on average paid just under 27 percent of premium costs.

"In a year when the pandemic continued to cause health and economic disruption, there were only modest changes in the cost of employer-provided health benefits," said Gary Claxton, a KFF senior vice president and director of the organization's Health Care Marketplace Project.

The past two years may have been a respite from the trend of health care benefit costs handily outpacing inflation and wage gains, and the resumption of elective and non-emergency care in the latter half of 2021 is likely to show up in higher premium rates when 2022 premium increases are reported.

Taking a decadelong view, since 2011 average family premiums have increased 47 percent, besting increases in wages (31 percent) and consumer price inflation (19 percent) during this period.

Deductibles Up 92% over Decade

The average single deductible this year stood at $1,669, similar to the average in each of the past two years ($1,644 in 2020; $1,655 in 2019) but up significantly when compared to the average deductible in 2011 ($991), KFF's survey showed.

This year, 85 percent of workers enrolled in employer-sponsored health coverage had a deductible in their plan, up from 74 percent a decade ago.

Among covered workers with a deductible, those at small firms with less than 200 employees face deductibles that are 70 percent higher on average than those at large firms with at least 200 employees ($2,379 vs. $1,397).

Expanded Mental Health Coverage

"Some employers adapted their plans to address mental health and other challenges facing their workers due to COVID-19," Claxton said. "The expansions of telemedicine and mental health benefits were important in meeting the needs of employees and their families in difficult times."

Since the beginning of the pandemic, firms with at least 50 workers that offer health benefits have:

• Changed their telemedicine coverage (65 percent), such as by adding more providers.
  

• Changed their wellness programs (55 percent), such as by adding new digital apps.
  

• Changed their mental health and substance abuse benefits (39 percent), such as by expanding online counseling services.
  

"The expansions of telemedicine and mental health benefits were important in meeting the needs of employees and their families in difficult times," Claxton said.

Higher Premiums for 2022

U.S. employers were expecting their group health plan premiums to increase, on average, around 5 percent in 2022, even after taking cost-management initiatives into account, according to recent employer surveys by several HR consultancies. Among recent forecasts:

• Willis Towers Watson's 2021 Best Practices in Health Care Survey projects a 5.2 percent increase in health plan costs next year, based on responses from 378 U.S. employers during June and July 2021.
  

• Mercer's National Survey of Employer-Sponsored Health Plans 2021 pegs the premium increase figure at 4.7 percent for 2022, based on 1,502 employer responses since mid-June.
  

• Aon's health plan cost forecast projects that costs for large, self-funded U.S. employers will increase on average 5 percent to more than $13,000 per employee in 2022, based on a survey of the health care costs and benefits designs of more than 700 large U.S. employers and taking plan design changes and vendor negotiations into account.
  

Employers recently learned what the costs for their own plans will be, and those cost increases were shared with employees during fall 2021 open enrollment periods for 2022 benefits. Employer surveys to be conducted during the first half of 2022 will reveal if the above forecasts are on target.

Related SHRM Article:

Health Plan Cost Increases Returning to Pre-Pandemic Levels, SHRM Online, October 2021