If you’re an employer who is considering adding Group Health Insurance for your employees, you may be wondering what your monthly costs might be. The easy answer is, “That depends.” Read on to learn more.

How Much Should You Pay for Group Health Insurance?

Factors Influencing Costs

There are many things that could affect your group’s health insurance costs, including:

• The number of employees (both full-time and part-time)
• Whether you will insure employees only or employees and their eligible dependents
• The ages of all planned enrollees – employees and dependents (if covered)
• Business location (What is your California Geographic Rating Area?)
• Locations/residence ZIP Codes of employees (Rates are tied to the member’s ZIP Code.)
• The coverage selected (traditional health insurance, self-funding, level-funding, etc.)
• Selected ACA metal tier (Bronze, Silver, Gold, Platinum)
• Plan or plans offered: HMO, PPO, EPO, HSA-qualified health plan, or others
• The contribution you will make toward employees’ premiums (Most companies require a 50% or more contribution on employer-sponsored health insurance benefits.)
• Added benefits for Dental, Vision, or other coverage – and whether it will be offered on an employer-sponsored or voluntary basis.

In most states, tobacco use is also a rate consideration; however, in California and a half-dozen other states, tobacco use does not affect individual insureds’ premiums.

Survey Findings on Costs

Employer-sponsored health insurance is the largest source of coverage for non-elderly U.S. residents. More than sixty percent of those under age 65, nearly 165 million people, had insurance through their employer in 2023 according to the Kaiser Family Foundation (KFF) Employer Health Benefits Survey.

In 2023, KFF found the average annual premium for employer-sponsored health insurance was $8,435 for single coverage and $23,968 for family coverage. Both were up seven percent year over year.

For covered workers at smaller firms, the average single and family coverage premiums were slightly higher. For workers with high deductible health plans with a savings option, the average was lower. PPO average premiums were $8,906 for single coverage and $25,228 for family coverage. Private for-profit firm premiums were lower than either private not-for-profit firms or public firms.

As far as employer contributions to plan costs, most workers in 2023 contributed to the cost of coverage. On average, the employee contribution toward single coverage was 17%, while the family coverage contribution was 29%. At smaller firms, the share for family coverage was greater, 38% vs. 25%. According to the KFF survey, the average annual contribution in 2023 was $1,401 for single coverage and $6,575 for family coverage.

Plan Popularity

KFF found PPOs continued to be the most popular plan type in 2023. Nearly half (47%) of covered workers were enrolled in a PPO, nearly one-third (29%) in a high deductible plan with a savings option, 13% in an HMO, 10% in a point of service plan, and one percent in an indemnity plan. These figures are all similar to recent years.

Self-funded plans are popular among larger employers. Sixty-five percent of covered workers in 2023 were enrolled in plans that are self-funded. Thirty-four percent of smaller firms have a level-funded plan.

Finding Coverage for Your Group

If you’re ready to shop for coverage for your group, a great first step is to talk with an employee benefits broker. Using a broker doesn’t cost you anything, and it could actually help you save money. That’s because a local broker will know the plans available in your area. You can also learn which have the broadest provider networks and what medications are available.

Be sure to ask your broker about the CaliforniaChoice multi-carrier exchange. It offers you and your employees access to a diverse range of health plans and more than 120 coverage options.

If you don’t have a current broker, CaliforniaChoice makes it easy to connect with one.