Employee Benefits Benchmarking: Insurance Premiums

March 30, 2017

The 2018 Zenefits Small Business Benefits Benchmark Report is now available. Representing data from more than 8,000 Zenefits customers, the report examines how plan types, contributions, premiums, deductibles, copays, and out-of-pocket costs differ across regions. The study is intended to help businesses make more informed decisions by providing insights into the choices of similar companies within the same region and nationally.

So far the response from customers has been great. As one customer said: “Please pass along my thanks to the team that created the Benefits Benchmark Report. This information is GOLD to businesses like mine. I also have to say that in addition to appreciating the data, I feel “heard” by Zenefits. I asked for this type of information and the next thing you know… BOOM, there it is,” Patti Gamble, Sr. Manager, HR & Operations, elevate. 

A quick summary of the Insurance Premiums section of the report:

One area that is top of mind for both businesses and employees is the rising cost of health insurance. The report found that average monthly premiums for both individuals and families are relatively stable across the country, with above average costs in the Northeast.

Prices May Vary

Premiums can vary significantly for certain regions given the different plan design options, carrier underwriting, provider network strength, etc. For example, companies based in New York with dominate EPO plans have higher average premium costs of approximately 22% compared to California. Another cause of some variation might be an employer’s physical location versus where the majority of the employees live. This can cause a big coverage and premium cost differential.

Trend: Total premiums continue to rise, but at lower increases, thanks to greater selection, new technologies and better data availability.

The average monthly premium for individuals is $466 while the average monthly premium for families is $1,168. For an employer, the most important and certainly the most visible aspect of health insurance is the total premium cost. So while some group premiums have experienced slower increases than in the past, they are still growing in the mid-to-high single digit territory. What is helping to slow the increases? There are a few contributors:

  • Expanded options – Certainly one that can have an easy ~5% difference is expanded options and the introduction of more cost effective plans to employees. With expanded options, companies can choose the best plans for their specific needs. (get the full report to see average number of plans offered).
  • Better technologies, tools and data for buyers – There are more technologies, tools, and data available to offer more plans, so that an employer can do so and experience same or often lower, costs. For employees, they now have the proper information and tools to take a lower cost plan where previously there wasn’t enough information to feel comfortable in doing so, or, there just wasn’t the option available in the first place. This will only get better as market transparency and technology tools continue to accelerate and collectively push the market forward.

Trend: The average monthly premium for individuals and families is stable regardless of company size. This is not a big surprise as smaller companies are typically just a few points higher in costs.

Benefits are Key to Attracting and Retaining Talent

Employee benefits, specifically health insurance, represent a huge investment for small businesses and remain a key consideration for attracting and retaining employees.

The 2018 Zenefits Small Business Benefits Benchmark Report can help answer common questions including:

  • What type of health insurance benefits are similar types of companies offering?
  • Which plan types are are most popular in my region?  
  • How much are similar companies contributing to employee and dependent premiums?
  • What are the average premium cost shares for the company and employees?

To download the report now, click here.


Tim Cerimele is co-founder of the Zenefits Insurance Advisory Board. He has 10 years of experience as a benefits consultant, manager, and director of operations at a national benefit firm. Recently, Tim has been focused on the ACA's impact, access to care behind new and unique health plan contracting and benefits technology.

Category: Benefits, Health Care Cost, HR Tips & Trends, Zenefits

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