New study: Employer-sponsored health insurance produces + 47% return on investment for US business

Washington – Employers in the United States this year will earn an average return on investment (ROI) of 47% of their employer-sponsored health insurance (ESI) programs, according to a new study by Avalere Health. This means that for every dollar spent on ESI, employers receive $ 1.47 in financial benefits. The health data firm’s analysis found that the average return on investment is expected to rise to 52% in 2026, and that companies that invest more in their ESI programs tend to have higher returns on investment.

Although providing high-quality employee health insurance is the right thing for workers, the report shows how business makes sense. Avalere attributes the direct financial return to employers to lower direct medical costs, increased productivity, lower recruitment costs, stronger retention, lower short-term and long-term disability costs, and tax breaks. More than 155 million Americans currently receive their health insurance through ESI.

The study was commissioned by the US Chamber of Commerce on behalf of the Protecting Americans’ Coverage Together (PACT) campaign. PACT members, including the US Chamber of Commerce, the Business Roundtable, the National Association of Manufacturers, the Affordable Care Council and Vermeer Corporation, are leading voices for employers focused on strengthening employer-sponsored insurance and insurance (ESI). the coverage and benefits that American families depend on for their health.

The Avalere report examines trends in various industries that lead to higher and lower returns on investment. Avalere cites the manufacturing industry as an example, finding that US manufacturers see a 42% return on investment for their ESI programs.

“Employee-sponsored health insurance is beneficial for employers and employees,” they said. Katie Mahoney, vice president of health policy at the US Chamber of Commerce. “We know that employees attach great importance to quality health insurance in the workplace and now we have more evidence that employers benefit significantly from investing in these programs. Employer coverage is the backbone of the US health care system, and this report confirms that all reforms must be based on this model, which is good for both workers and companies.

“Improving productivity and prosperity makes America more competitive and prosperous,” he said. Joel White, President of the Affordable Care Council. “While employers offer health coverage to improve the health and well-being of their employees, employees and their families benefit significantly. This study shows that Congress and the administration need to work to expand the scope of jobs, not weaken them.

“Manufacturers are in the business of innovating and delivering best-in-class products to their customers,” they said. Robin Boerstling, Vice President, Infrastructure Policy, Innovation and Human Resources at the National Association of Manufacturers. “This philosophy extends to the benefits provided to their employees, and this report further confirms that offering comprehensive and innovative health benefits is not only the right thing to do, but also crucial to attracting and retaining the best. the best talents. We are proud that approximately 99% of NAM member companies offer health benefits to employees, and working Americans understand the value and competitiveness of employer-sponsored health care.

“As an employer, knowing who we care for and the communities they come from gives us the advantage of providing access to quality, affordable care for our team and their families,” he said. Vermeer Corporation. “It’s an extremely important part of the way we take care of our people.”

The study, which surveyed employers with 100 or more employees, defined return on investment as “the monetary value of compensation for every dollar that employers invest in health care.” Investments in ESI may include health insurance premiums, wellness programs, direct medical expenses, administrative expenses related to the processing of medical claims, and other expenses related to the provision of health insurance. Avalere calculated the return on investment received by ESI by dividing the employer’s total income by the total cost of providing ESI.

The full report, including the methodology, can be found here.

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