Insurance costs keep rising, particularly for employers. According to the Kaiser Family Foundation/HRET Employer Health Benefits 2007Annual Survey, the average employee health insurance premium increased 6.1% from 2006. That’s more than double the rate of inflation. The average cost of a family PPO plan is now more than $12,000, compared to around $10,000 just three years earlier in 2004.

Fortunately for employees, employers pick up most of that cost. In 2007, on average, employers picked up 84% of premium costs for single coverage and 72% of the premium for families. These percentages have remained fairly stable for a number of years.

Larger companies tend to pay more of the costs: large firms paid on average 77% of family coverage premium costs, compared to smaller companies’ 64%. See what other BuyerZone users paid for Health Insurance.

Generally, conventional employee health insurance tends to be the most expensive program for individuals, followed by PPOs, POSs, then HMOs. For families, PPOs are the most expensive, with POSs the cheapest.

HMO
HMOs are the lowest cost option for health insurance, with total premiums for individuals averaging $4,299 and employer contributions averaging $3,588 of that amount.

Besides monthly premiums, out-of-pocket costs for employees include low co-payments for visits to physicians within the network and for prescription drugs. These co-payments generally range from $5 to $25. And visits to physicians outside the network are generally not covered at all.

As with most plans, employees pay up to a deductible each calendar year (typically between $250 and $1,000) as benefits are provided, then around 10 to 20 percent co-insurance of any additional charges.

PPO
PPOs cost employers an average of $4,638 per covered employee, with total premiums averaging $3,920. While almost as expensive as conventional health plans, they are much more popular with employees and employers because of their greater flexibility.

In terms of patient out-of-pocket costs, PPOs can vary tremendously. Some networks require members to pay only a small deductible with each visit, much like an HMO. Most have deductibles and co-payments similar to HMOs, and most will require members to pay significant co-insurance on out-of-network visits.

POS
Average costs for POS plans are slightly higher than HMOs: total premiums average $4,337 with employer contributions averaging $3,709.

POS plans keep out-of-pocket expenses low with easy co-payments for visits within their networks and for referrals. Employees who choose to go outside the network, however, will pay much more in co-insurance.

Broker fees
Health insurance agents and brokers are paid by the insurer, based on the value of the policies you purchase. If you contract your broker to provide other HR services, such as life insurance or handling COBRA administration, you may have to pay additional fees.