Employer health plans are expensive in Massachusetts

If you work for a Massachusetts company, it’s likely your employer offers health insurance. But it will cost you.

Survey results of 806 employers released Thursday by the Center for Health Information and Analysis found that 74 percent of Massachusetts firms offered their employees health insurance in 2021, compared to 59 percent of companies nationally.

But that insurance was expensive. The average monthly premium for single coverage was $715, compared to a national average of $645. Nearly half (46 percent) of employees were enrolled in a high deductible health plan, one where a single person must pay at least $1,400 out of pocket and a family must pay $2,800 before insurance begins to cover their costs.

The latest CHIA data, from a survey conducted between May 2021 and January 2022, reflects a struggle Massachusetts residents have faced for years. Since Gov. Mitt Romney signed the state’s universal health care coverage law in 2006, Massachusetts residents have generally been more likely than their counterparts in other states to be able to obtain health insurance. But Massachusetts has perennially struggled with costs that are some of the highest in the nation, despite policymakers’ efforts to contain them.

The survey found that Massachusetts has a strong culture of businesses offering employees health insurance, with virtually all companies that have over 200 employees and 73 percent of smaller firms offering insurance. On average, 76 percent of a company’s workers were eligible for the insurance (part-time workers, for example, are often ineligible) and about 70 percent of those eligible used it, leading to just over half of workers (53 percent) actually getting health insurance from their employer. That is a smaller percentage than those who get employer-based health insurance nationally, which could be because Massachusetts makes it easier to get health insurance outside the employer-sponsored model.

Employers who offered health insurance tended to do so because it helped with employee retention and recruitment and because business owners felt it was “the right thing to do.” Employers who didn’t offer insurance most often said their workers received coverage elsewhere or the cost of health insurance was too high.

The report found that the insurance plans generally carry high costs. In 2021, 70 percent of companies offered a high-deductible health plan, and at 55 percent of firms, that was the only plan offered. (Some of those companies did offer a health savings plan option, where employees can set aside money pre-tax to cover out-of-pocket medical expenses.) Among all plans with deductibles, the average annual deductible for single coverage was $1,660.

Overall, Massachusetts workers are contributing more than the national average to pay for insurance, both because of higher premium costs and because employers expect workers to pay a larger portion of the cost. Average monthly premiums are as high as $1,956 for an employee with a spouse and dependent children, and employees paid an average of 28 percent of this cost themselves, nearly $550. For a single person, the average monthly premium was $715, of which an employee paid on average just under $180.

Sixteen percent of employers said they increased member contributions this past year to control costs.

The survey also asked how workplace benefits changed as a result of the COVID-19 pandemic. It found that 9 percent of businesses furloughed or laid off employees, and 21 percent had employees who left voluntarily. Those who chose to leave were most likely workers with children (38 percent) and those with underlying health conditions (34 percent), followed by part-time workers, older workers, and women. The most common change to health plans since January 2020 was that 49 percent of firms expanded access to telehealth.




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