Retirement & Financial Planning Report

With annual health insurance open seasons under way both in the government and in many private companies, attention once again is turning to the sharing of premiums between the government and enrollees, a policy that long has been fixed on the government side but variable on the private sector side.

An analysis by the Kaiser Family Foundation showed that only 55 percent of private sector firms offer health insurance coverage to their employees, which covers 62 percent of the private sector workforce—in contrast to the government’s FEHB program that covers nearly all active employees. Even some of those that do offer coverage have restrictions that don’t apply in the FEHB program, such as limits on coverage for spouses who also are eligible for coverage under their own employer’s policy.


On the other hand, in 14 percent of companies that do offer health insurance, the entire premium is paid by the employer with no enrollee share.

Another difference involves the premium sharing formulas. In the FEHB program, enrollees pay about 70 percent of the total premium cost for either self-only or self and family coverage (postal employees typically pay less).

In contrast, among private sector plans covered workers on average pay only 18 percent for self-only coverage but 29 percent—about the same as FEHB enrollees pay—for family coverage. Also, there is variation by size of employer, with workers in smaller firms contributing lower average percentages for self-only coverage but higher average percentages for family coverage. Further, workers in firms with high percentages of lower-wage workers on average contribute more for both types of coverage.