Employer-Backed Health Plans in 2018

With new statistics from the Kaiser Family Foundation and the Health Research & Educational Trust, the average cost of employer-backed family health plans has risen by 3%. This is the exact same increase that family health plans experienced in the year of 2017. Over a time period of the last 6 years, employer-backed health plans have not seen an increase of over 5%.  According to Kaiser’s research, the United States citizens as a whole, 49% of the population, is employer-backed health care. That’s about 151 million people who are under an employer-back plan.

Why Employer Backed Plans

It is possible for employees to purchase insurance on their own, but the cost of private individual coverage is exceedingly high. Without a real alternative to these high prices, employer-backed group coverage works as a viable alternative to those who need insurance. The price difference between employer coverage and individual coverage varies for many reasons. Most people take out private insurance due to the fact that they need a higher cost of coverage, due to illness, disabilities and health issues. With employer insurance, people buy it because it covers most basics and is inexpensive as a result of the group rates. If you needed better coverage 9/10 you probably would not go straight to employer-backed plans.

Why Do Employers Offer These Health Plans

Have you wondered what employers might gain from offering cheap insurance? Well, there are a few reasons, one being the tax incentives for employers because they offer coverage to workers and their dependents. With offering coverage,  the payments for health insurance will be taken away from the gross revenues (the total amount of sales recognized for a reporting period, prior to any deductions). This lowers the total taxable income on employers, giving them a lower amount lost to taxes. Another reason could be the fact that employers want to keep their employees healthy. The better someone is feeling the higher their productivity level. With this in mind, it’s in the employer’s best interest to offer their employees health insurance.

Does your company offer employer-backed health plans? It might be a good idea to review your current plan and see what your best option is. It’s also a good idea to contact an agent so that you have an expert look at your options.

Since insurance is often times overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions.  So if you have any questions or concerns, comment below and your question may be the topic of our next video!

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