Workers at lower-wage firms on average pay $1,000 more each year out of their paychecks for family coverage than workers at higher-wage firms ($4,977 and $3,968, respectively) according to the not-for profit Kaiser Family Foundation (KFF) and Health Research & Educational Trust (HRET)’s 2012 Employer Health Benefits Survey report.

In the study, low-wage firms were classified as those where at least 35 percent of their workers earn $24,000 of less a year and high-wage firms were classified as those where at least 35 percent of their workers earn $55,000 of more a year.

The higher low-wage worker contribution toward family coverage occurs even though the average total premium cost (employer plus employee paid) for family coverage at firms with many lower-wage workers is lower than at firms with many higher-wage workers ($14,694 and $16,427, respectively).  In most cases, low-wage firm total premium costs are lower because of less comprehensive coverage.

There are other significant differences when comparing low-wage and high-wage firms including employee out of pocket exposures.  Specifically, 44 percent of covered workers at firms with many lower-wage workers face an annual deductible of $1,000 or more, compared with 29 percent of those at firms with many higher-wage workers. Across all employers, 34 percent of covered workers face a deductible of that size, including 14 percent with deductibles of at least $2,000 annually.

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DISCLAIMER: Because of the generality of this update, and based on particular situations, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.

© Connelly, Carlisle, Fields & Nichols 2012