Unexpectedly Intriguing!
January 30, 2008

Stethoscope on Insurance Form How much does it cost U.S. employers to provide health insurance to their employees?

As it happens, the answer depends on what kind of health insurance that employers make available to their employees, the number of people who are covered by the employee's insurance and also the size of the company for which they work.

Our first two charts revealing how much the average annual premiums are by health insurance plan type presents how much it costs both employees and employers for covered Single workers, at both small companies (those between 3 and 199 workers):

Average Annual Employer and Employee Paid Premiums by Health Insurance Type for 2006 for Single Workers at Small Companies

and large companies (those with more than 200 workers):

Average Annual Employer and Employee Paid Premiums by Health Insurance Type for 2006 for Single Workers at Large Companies

The next two charts present similar data for workers whose families are also covered by the various employer-provided health insurance plan types, first for those working at small companies (data is for a family of four):

Average Annual Employer and Employee Paid Premiums by Health Insurance Type for 2006 for Workers with Families (with Four Members) at Small Companies

and now for those working for companies with more than 200 employees:

Average Annual Employer and Employee Paid Premiums by Health Insurance Type for 2006 for Workers with Families (with Four Members) at Large Companies

The tables we're presenting below are drawn from the Kaiser Family Foundation's 2006 Annual Survey of Employer Health Benefits, provide the average annual costs according to these factors and also break down how much of the total cost is paid by the employer and how much is paid by the employee. We've used our dynamic table sorting technology in creating the tables, which allows you to rank the date in the tables by clicking the appropriate column heading so you can find which types of plans are the most or least costly. The first table provides data for covered single workers:

2006 Average Annual Premiums for Covered Single Workers by Plan Type
Plan Type Firm Size (Number of Workers) Total Annual Cost [$USD] Employer Annual Contribution [$USD] Employer's Percentage of Total Cost Employee Annual Contribution [$USD] Employee's Percentage of Total Cost
Conventional Small (3-199) 4,222 4,222 100.0% 0 0.0%
Conventional Large (200+) 4,020 4,020 100.0% 0 0.0%
HMO Small (3-199) 3,899 3,427 87.9% 472 12.1%
HMO Large (200+) 4,114 3,472 84.4% 642 15.6%
PPO Small (3-199) 4,505 4,014 89.1% 491 10.9%
PPO Large (200+) 4,326 3,618 83.6% 708 16.4%
POS Small (3-199) 4,109 3,478 84.6% 631 15.4%
POS Large (200+) 4,238 3,599 84.9% 639 14.8%
HDHP/SO Small (3-199) 3,206 2,732 85.2% 474 14.8%
HDHP/SO Large (200+) 3,589 2,932 81.7% 657 18.3%

The next table provides data for covered workers with families consisting of four members. Note that for many of the plans, while the employer's portion is less than four times their cost for a single worker, the employee's portion of the total premium cost for each type of plan is approximately four times that of a single worker, or even more:

2006 Average Annual Premiums for Covered Workers with Families by Plan Type
Plan Type Firm Size (Number of Workers) Total Annual Cost [$USD] Employer Annual Contribution [$USD] Employer's Percentage of Total Cost Employee Annual Contribution [$USD] Employee's Percentage of Total Cost
Conventional Small (3-199) 10,800 10,800 100.0% 0 0.0%
Conventional Large (200+) 10,829 10,829 100.0% 0 0.0%
HMO Small (3-199) 11,137 6,945 62.4% 4,192 37.6%
HMO Large (200+) 11,339 8,741 77.1% 2,598 22.9%
PPO Small (3-199) 11,793 8,296 70.3% 3,497 29.7%
PPO Large (200+) 11,752 9,124 77.6% 2,628 22.4%
POS Small (3-199) 10,706 7,187 67.1% 3,519 32.9%
POS Large (200+) 11,573 8,688 75.1% 2,885 24.9%
HDHP/SO Small (3-199) 8,896 6,830 76.8% 2,006 23.2%
HDHP/SO Large (200+) 10,013 7,604 75.9% 2,409 24.1%

Descriptions of the various types of health insurance plans are available through our post showing which types of plans were the most commonly used in the United States in 2006!

Where are we going with all this? Not necessarily where you might think, although we're aiming to get there next week!

Update (31 January 2008): Added charts showing the data in the tables!

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