Employers Can Help Prevent Large Healthcare Premium Hikes Expected in 2023 for Families and Individuals

by | Nov 3, 2022 | Healthcare

Employer-sponsored health insurance premiums for families and individuals increased slightly this year from 2021 – but that is changing in 2023. One consideration for this impending increase is that employer costs for this year were largely set last year before inflation became a major economic concern so these increases will be felt in 2023 since they were not accounted for in 2022.  Marketplace insurers are proposing a 10% premium rate hike in 2023 in13 states and DC.1

Companies are looking to implement higher premium increases instead of swallowing rising prices from hospitals, doctors, and drug companies. This increase also is fueled from the anticipated increase of claims expected in 2023. As the pandemic moves into the rear view many elected surgeries and non-urgent procedures consumers put off during the past three years are expected to be a priority in 2023.

“Employers are already concerned about what they pay for health premiums, but this could be the calm before the storm, as recent inflation suggests that larger increases are imminent,” says Drew Altman, president and CEO of KFF. “Given the tight labor market and rising wages, it will be tough for employers to shift costs onto workers when costs spike.” 2  Employees are already feeling their pennies pinched at the gas pumps, grocery stores, rent/mortgage, and utility increases in 2023 we will be adding health insurance premiums to the list.

The latest KFF Employer Health Benefits Survey finds that annual family premiums for employer-sponsored health insurance average $22,463 this year. On average, workers this year are contributing $6,106 toward family premiums, with employers paying the rest. Among workers who face an annual deductible for single coverage, the average this year stands at $1,763, similar to last year ($1,669) but up 61% since 2012 ($1,097).  Even with this year’s minimal change, average premiums for family coverage have risen 43% since 2012, more than the shift in inflation (25%) and a little more than wages (38%) over the same period.3

Most premium changes insurers are requesting for 2023 fall between about 5% and 14% (the 25th and 75th percentile, respectively). Compared to recent years, relatively few insurers are requesting to lower their premiums, with only 4 out of 72 insurers filing negative premium changes, and the remaining 68 insurers requesting premium increases.1

The report reveals ongoing disparities in the burden of health care costs on workers at smaller and large employers. Workers at small firms (with less than 200 workers) on average pay $7,556 out of their paychecks annually for family coverage, nearly $2,000 more than workers at larger firms ($5,580).2

What Can Employers Do?

Employers should consider different healthcare models and consider ancillary benefits that can help ease the impending healthcare premium increase for their employees before it impacts their workforce.  Self-Insured employers have a multitude of options that can assist with lower employee premiums that also can yield a 20-30% plan cost reduction for the employers as well. The best part these health plan options will also increase the quality of care and expand the network of health professionals available without in-network limits.  This 20-30% in healthcare saving for the employer can be passed along to not increase employee premiums and provide funds that can be used in compensation or other avenues to retain and attract top talent to the team.

Call or email a Premier Workforce Solutions consultant today to set up a no obligation virtual (or in-person) 30-minute meeting to learn more. It’s never too early (or late) to find a better healthcare plan for your business and employees.

Benefits Solutions


1- https://www.benefitspro.com/2022/07/25/insurers-propose-10-premium-hike-for-2023/

2- https://www.benefitspro.com/2022/10/27/large-premium-hikes-for-families-and-individuals-likely-after-small-increases-this-year/?kw=Large%20premium%20hikes%20for%20families%20and%20individuals%20likely%20after%20small%20increases%20this%20year&utm_source=email&utm_medium=enl&utm_campaign=bprodailynews&utm_content=20221028&utm_term=bpro

3- https://www.kff.org/health-costs/report/2022-employer-health-benefits-survey/