Workplace family health insurance premiums soar to nearly $24,000 this year | CNN Business

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Workers and their employers are paying significantly more for job-related health insurance this year.

The annual cost of family health insurance coverage at work has soared to an average of nearly $24,000 this year, according to KFF. Employer Health Benefits Survey, released Wednesday. This is an increase of 7% compared to last year.

Employees pay an average of $6,575 for their share of the bonus, an increase of almost $500, or nearly 8%, compared to last year, according to the annual survey. Their companies pay the rest of the bill.

We have a huge increase in premiums this year. There’s simply no other way to solve this problem, said Matthew Rae, co-author of the survey. There are many affordability challenges for employer coverage.

For individual insurance, the average annual premium increased to $8,435, also up 7% from last year. Workers pay just over $1,400 of the bill, about $75 more than last year.

While significant, the increase in bonuses is roughly in line with the rise in wages and inflation since 2022, as well as over the past five years, according to KFF. The situation is different from the early 2000s, when bonuses soared by double digits but inflation and wage growth were relatively moderate.

The tight job market has prompted companies to avoid watering down their health insurance coverage because it can be a recruitment and retention tool.

Deductibles have remained essentially flat this year, which could reflect employers’ concerns about how much workers must pay out-of-pocket when they need medical care, KFF said. The average annual deductible is approximately $1,735 among workers with a deductible for individual coverage.

Employers want to continue offering good benefits to keep good people, Rae said.

Still, workers should prepare for bonuses that would further reduce their pay in coming years. Nearly a quarter of companies said they would increase their employees’ social security contributions over the next two years, according to KFF.

Workers at small businesses typically pay significantly more for coverage than their peers at businesses with at least 200 workers.

KDC Mailing & Bindery faced an overall premium increase of about 13 percent for this year, said Steve Van Loon, director of operations for the Tempe, Ariz.-based company, which employs 42 workers.

The company, which only began offering health benefits in 2019 to be more competitive, increased workers’ premiums by 3% but had to raise prices by as much as 5% to help itself cope with increasing costs. KDC has the rest covered.

Next year, the company probably won’t be able to be as generous to its staff, Van Loon said.

Our profit margins do not allow us to absorb these costs, he said. We would be bankrupt.

Large employers with workers in more than one state may struggle to offer abortion coverage after the 2022 Supreme Court ruling that ended the federal constitutional right to abortion. Several states have passed laws that ban or restrict access to abortion.

One in 10 large companies with at least 200 employees said their largest plan does not cover legal abortions, KFF found. Another 18% said they only cover abortion in limited circumstances, such as rape, incest or endangering their health or life.

Nearly a third of large companies said they cover abortion in most or all circumstances, while 40% said they were unsure of their coverage policy, perhaps because that it was evolving or that they did not know the details.

After the Supreme Court’s ruling, several companies said they would offer financial assistance to employees who had to travel to other states to have an abortion. About 7% of large employers and 19% of companies with at least 5,000 employees offer or plan to offer such reimbursement.

KFF has not asked these questions about abortion in previous surveys.