Trends in 2021 Employer Sponsored Health Plan Costs, Coverage
Almost half of private-sector businesses offered access to an employer-sponsored health plan and 85 percent of employees were eligible for coverage in 2021.
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- Employer-sponsored health plan costs rose in 2021, but access to employer-sponsored insurance also increased as more private-sector businesses offered coverage, according to a report from the State Health Access Data Assistance Center (SHADAC).
The report includes estimates from the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) released by the Agency for Healthcare Research and Quality (AHRQ) and 2021 MEPS-IC private-sector employer-sponsored insurance estimates.
Compared to 2020, more employees worked at small firms with less than 50 workers in 2021. The share of private-sector workers employed at small companies increased from 23.2 percent in 2020 to 26.1 percent in 2021.
An employer’s size typically influences their ability to provide coverage to workers and how much the coverage costs. Therefore, changes in the market composition can drive changes in employer-sponsored coverage and costs, the report noted.
The share of private-sector businesses offering health insurance to their employees in the United States rose from 47.4 percent in 2019 to 49.2 percent in 2021. The percentage of employers offering coverage varied across the country.
For example, Maryland, Mississippi, Vermont, Virginia, and Wisconsin saw significant increases in employer offer rates. The share of employers offering health insurance ranged from 34.3 percent in Alaska to 81.9 percent in Hawaii.
Most private-sector employees (85.7 percent) worked at businesses that offered health insurance coverage, the report found. This figure was similar before the pandemic, at 85.3 percent.
The percentage of employees whose employers offered insurance ranged from 70.2 percent in Wyoming to 97.2 percent in Hawaii. The District of Columbia and Mississippi saw substantial increases, while South Carolina and South Dakota experienced decreases.
Out of the employees who worked at an establishment that offered health insurance, 80.3 percent were eligible for coverage in 2021, compared to 77.7 percent in 2019. Seven states saw significant increases and no states saw decreases.
Nearly 70 percent of eligible employees enrolled in an employer-sponsored health plan in 2021, falling from 71.9 percent in 2019. Seven states and the District of Columbia experienced significant decreases, while no states saw increases.
As access to employer-sponsored insurance grew in 2021, so did costs.
The average employer-sponsored health plan premium for single coverage and family coverage each increased by three percent between 2020 and 2021, the report found. Annual premiums rose to $7,380 for individuals and $21,381 for families.
The increase in annual single premiums in the US was $231. Three states and the District of Columbia saw substantial gains, while Hawaii experienced a decrease in single premiums. West Virginia saw the most significant increase in average single premiums between 2020 and 2021, rising 15 percent to $8,046.
Average family premiums in the US rose by $623. Family premiums increased in eight states and decreased in one state, South Carolina. North Carolina saw the largest increase in average family premiums, which rose 12.8 percent to $22,737 in 2021.
Premiums varied across the country, with single coverage premiums ranging from $6,340 in Arkansas to $9,037. Family coverage premiums ranged from $18,339 in Arkansas to $24,455 in the District of Columbia.
Employer-sponsored health plan deductibles also grew in 2021. The average deductible for single coverage increased 3 percent to $2,004, while the average family deductible increased 3.9 percent to $3,868.
In addition, high-deductible health plans (HDHPs) were more common. The share of employees enrolled in an HDHP increased from 52.9 percent in 2020 to 55.7 percent in 2021.
