Some Employers Cover Full Health Insurance Costs as Premiums Surge
Facing rapidly increasing health insurance premiums, a growing number of U.S. companies are choosing to cover 100% of their employees’ medical plan costs, a move that could reshape employer-sponsored healthcare benefits.
Total premiums have risen over 24% since 2019, and are projected to continue climbing, with the average annual premium for a family of four exceeding $25,500 last year, according to the Kaiser Family Foundation. While employers typically share the cost with workers, some, like Boston Consulting Group, are now absorbing the full expense for their roughly 10,000 U.S. employees and their families. “Healthy employees make for a productive workforce — and also a place where our teams want to come to work every day,” says Alicia Pittman, BCG’s chief people officer.
This trend isn’t limited to large corporations; smaller businesses and nonprofits are also adopting similar policies. Zocdoc, a company specializing in online doctor’s appointment scheduling, offers a zero-premium plan with a higher deductible, contributing to employee health savings accounts to offset the cost. “Health care is one of these nonnegotiables,” says CEO Oliver Kharraz. Startup Bartesian, based in Chicago, covers all medical, dental, and vision premiums for its 30 employees and their families, alongside a $1,000 annual contribution to flexible spending accounts. This shift comes as healthcare costs continue to outpace wage growth, putting a strain on household budgets.
While offering zero-premium plans can be a significant investment, companies report benefits including improved recruitment, reduced employee turnover, and increased focus on work. The move reflects a growing recognition that comprehensive benefits packages are crucial for attracting and retaining talent in a competitive job market. Officials say they will continue to monitor the impact of rising healthcare costs and employer responses to these challenges, as discussed in our recent report on healthcare affordability.
