News & Tips • Employee Benefits: What Does the Average Employer Spend?
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While premium prices increased, employers still paid the same share. This is reflective of increasing premiums across the market. This percentage is a good place of comparison between years as they capture trends of the marketplace while accounting for its great variety.What influences a change in this percentage? One big component is the affordability standards set by the Affordable Care Act. According to the law, the lowest priced individual plan available to the employee must cost no more than 9.56% of the employee’s household income adjusted for inflation. Meaning an employee making $50,000 annually must pay no more than $398.33 for insurance. If an employer provided healthcare plan is deemed affordable by the ACA and meets the minimum value standard by covering 60% of total cost of healthcare services and including “substantial coverage of physician and inpatient hospital services,” employees who opt to enroll in a plan on the ACA marketplace rather than their employer sponsored plan would not qualify for tax subsidies
Data Courtesy of the KFF: https://www.kff.org/health-costs/report/2016-employer-health-benefits-survey/
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