Posted in Offering health benefits

How Much Is Health Insurance?

Like any shopper worth their salt, price plays a huge factor in whether or not you’ll be able to make it to the checkout line. And if you’re a company thinking about offering health insurance, the situation is the same. A slim 17 percent of small business owners believe health insurance is affordable, yet a large 27 percent still offer it. So why does this phenomenon occur? Because the employers who offer it know something special — you can have a big say in what your final price will be.

There are many ways you can personalize your plan to make sure it’s something that’s practical, exhaustive, and most importantly, something you can afford. In this article, we’ll help you prepare for the cost of health insurance by breaking down how the average premium is calculated. That’s right — you don’t have to pay a premium on your premiums. Keep reading to learn how.

But first, what’s in a premium?

A premium is the amount you and your employee pay each month to get your hands on health coverage. The average price depends on your plan type, business location, makeup of your team, and how much you want to contribute toward your employees’ premiums. Not too complicated, right?

To summarize, here’s a quick breakdown:

  • Comprehensiveness of coverage
  • Location, age, and smoking history of your employees
  • How much of the premium you want to cover

Now, let’s get a sense of what the costs are like. We dug into the data from the Kaiser Family Foundation’s Employer Health Benefits Survey* to find out what the typical premium price per employee was for 2015. Keep in mind that this is the total cost for an employee’s monthly premium. The amount you’ll pay as an employer will be much lower, since your team will also take care of a part of that total.

Monthly price per employee* Yearly price per employee*
PPO $548 $6,575
HMO $518 $6,212
All plans $521 $6,251

*Total price is split between the employer and employee

Where you’re located also flavors your final price. If you reside in a place where the cost of living is a lot, chances are your insurance price will be higher too. Castlight Health’s US Cities Analysis found that a doctor’s visit in San Francisco can cost $215, while in Miami the price is $96. It makes sense, considering the City by the Bay is steeper (in more ways than one) than the Magic City.

Here’s how the premium price breaks down by geographic region and plan type.

Monthly price per employee* Yearly price per employee*
PPO Northeast $600 $7,202
Midwest $543 $6,521
South $521 $6,256
West $557 $6,684
HMO Northeast $530 $6,365
Midwest $558 $6,700
South $496 $5,957
West $512 $6,139

*Total price is split between the employer and employee

The data shown here is from the Kaiser Family Foundation, and is used for illustrative purposes only. Your specific health insurance prices will vary.

What about dental and vision insurance?

Sporting dental and vision plans is crucial. In most cases, these two kinds of coverage are broken out from your medical insurance premium. That means they’re paid separately, and they also cost much less than a medical plan does. According to Kaiser, over half of companies that provide health insurance also supply dental insurance, while 35 percent offer vision coverage that is different from the coverage their health plan covers.

Employers offer these two benefits because they know that dental and vision coverage are key elements of preventive care. You can see what we’re talking about in this eye-opening (and mouth-opening?) research below from HCMS Group and the National Association of Dental Plans:

Importance of vision insurance

Condition Time condition is found through an eye exam Saving over four years per employee
High blood pressure 39% $2,233
High cholesterol 62% $1,360
Diabetes 34% $3,120

Importance of dental insurance

Condition Likelihood of having it among those without dental insurance
Heart disease 67% more likely
Diabetes 39% more likely
Osteoporosis 50% more likely

As you’re building your benefits package, be sure to weave in dental and vision coverage. The price is low, and the effect it has on employees can be monumental. You can’t beat that.

Dental, vision, and medical — it’s a lot to wrap your head around. But each type is an essential part of a meaningful benefits package, and they’re easy to snap together. When you’re ruffling through plans, keep in mind that real numbers will appear instead of projections. However, you now have a clearer idea of what those real numbers will look like when that day swings around.