2013 ADP Annual Health Benefits Report

This inaugural ADP Annual Health Benefits Report: 2013 Benchmarks and Trends for Large Companies highlights trends in employer-provided health benefits between 2010 and 2013. In addition, the 2013 data establish key benchmarks leading up to the implementation of the Shared Responsibility provision of the Patient Protection and Affordable Care Act (ACA) in 2014. Creating a valuable baseline, this report is the first in a series of annual studies planned to track key trends in the years ahead.

This research includes analyses of health care premiums, eligibility and participation by various demographic categories – including age, gender, marital status, income, number of dependents, state and industry. The trends reported here should provide HR professionals with strategic insights to help manage employee benefits in the coming years.

Key findings include:

Eligibility and Participation Remain Relatively Steady
Between 2010 and 2013, the percentage of full-time employees who were eligible for employer-provided health benefits remained relatively steady. The overall percentage of those participating in health benefits also remained relatively constant. However, there were marked variances among specific age groups.

Overall Premium Costs Continue to Rise but Are Moderating
The average monthly health plan premium rose 13.9% between 2010 and 2013. Since a spike of 7.6% between 2010 and 2011, the rate of increase has moderated, and premiums rose just 3.1% in the last year.

Employees with Higher Incomes Covered more Dependents
Employees with higher incomes tended to incur higher premiums but also covered more dependents.  When premiums were adjusted for total covered lives—employees plus dependents—the premium costs were constant among income levels, averaging $388 per month in 2013.

Lower Wage Employees Pay Larger Percentage of Income
Employees with higher incomes generally saw smaller percent changes in health plan premiums. Premium contributions as a percent of income increased at a higher rate for lower-wage employees.

Fewer Young Employees Opt to Purchase Coverage
Among employees under age 30, only slightly more than half participated in their employer’s health benefits program. Although eligibility declined in every age group since 2010, the largest decrease (4.6%) was among this group.