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California Employer Health Benefits: Prices Up, Coverage Down

Heidi Whitmore and Jon Gabel, NORC at the University of Chicago

The majority of Californians rely on their employers for health insurance, but these benefits continue to shrink as the cost to workers continues to rise.

Since 2000, the percentage of employers offering health benefits has declined in California and nationwide, although coverage rates among offering firms have remained stable. Only 55% of California firms reported providing health insurance to employees in 2016, down from 69% in 2000. Implementation of the Affordable Care Act (ACA) in 2014 does not appear to have impacted the overall trend in employer offer rates.

Nineteen percent of California firms reported that they increased cost sharing in the past year, and 27% of firms reported that they were very or somewhat likely to increase employees' premium contribution in the next year. The prevalence of plans with large deductibles also continues to increase.

California Employer Health Benefits: Prices Up, Coverage Down presents data compiled from the 2016 California Employer Health Benefits Survey.



Other key findings include:


Health insurance premiums for family coverage grew by 5.6%. Family coverage premiums have seen a cumulative 234% increase since 2002, compared to a 40% increase in the overall inflation rate.

Cumulative Premium Growth Compared to Inflation, Family Coverage, California, 2002-2016


The average monthly health insurance premium, including the employer contribution, was $597 for single coverage and $1,634 for family coverage in California, and was significantly higher than the national average.

Average Monthly Premiums, by Plan Type, California vs. US, 2016


41% of workers in small firms faced an annual deductible of at least $1,000 for single coverage, compared to 17% of workers in larger firms. The prevalence of these higher deductibles in small firms has increased substantially in the past five years.

Workers with a Large Deductible ($1,000+), Single Coverage, by Firm Size, California, 2006-2016


Only one in four firms with many low-wage workers (those earning $23,000 or less) offered health coverage to employees in 2016.

Employers Offering Coverage, by Firm Characteristics, California, 2016


In the past year, 24% of large firms extended eligibility for health benefits to workers not previously eligible.

Firms That Made Selected Changes in the Past Year, by Firm Size, California, 2016

The complete Almanac report, its charts, and past editions are available under Document Downloads.

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