Workplace insurance is a good deal for employers
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Employer-sponsored insurance may be getting costlier, but it still delivers a positive return for firms that cover their workers, according to a new Avalere Health analysis commissioned by the U.S. Chamber of Commerce and provided first to Axios.
Why it matters: Workplace insurance is the backbone of the American health care system, covering around half of the population. Whether it's a well-functioning system or not, workers and families depend on it.
What they found: The analysis measured what companies get back from each dollar invested in health benefits and concluded benefits exceeded costs for firms of all sizes this year, and that ROI will only grow through 2029.
- Employer insurance will yield an estimated 120% ROI to employers in the aggregate in 2025 and a 137% return in 2029, per the analysis.
- That comes from increased productivity, tax benefits and increased retention.
By the numbers: The average employer premiums in 2025 are $9,325 for single coverage and $26,993 for family coverage, according to KFF.
- Most of those premiums are paid by the employers themselves, and most workers pay a smaller contribution.
- Some economists argue that employees pay the full premium through foregone wages.
Yes but: Employers have responded to the yearslong climb in premiums by shifting more of the cost onto their employees.
- 88% of employees with individual coverage in 2025 have an annual deductible that must be met before the plan kicks in, per KFF.
- More than a third of covered workers are enrolled in a plan with an annual deductible of $2,000 or more for individual coverage.
The bottom line: Based on financial incentives laid out in the Avalere analysis, employer insurance isn't going anywhere. But that doesn't mean employees aren't feeling the pinch.
