Employers Spend Average of $2.60 per Hour Worked on Health Benefits

Private industry, state and local government employers paid an average of $2.60 per hour worked per employee to provide health benefits during March 2012, according to a recent Employer Costs for Employee Compensation (ECEC) report from the Bureau of Labor Statistics. The report found that benefit costs increased significantly depending on the size of the establishment. Small private businesses spend an average of $1.40 per hour worked while large private businesses (500+ employees) paid an average of $3.76. The average for private industry union workers was even higher at $4.95 per hour worked.

The average cost for health insurance benefits in the private industry was $2.21. Service workers incurred the least amount of costs per hour worked at $0.91 cents where management, professional, and related occupations cost employers an average of $3.32. Health insurance benefits were higher within goods-producing industries (averaging $3.00 per hour) than in service-providing industries (averaging $2.05 per hour). Grouped by major industry, health insurance costs ranged from $3.89 per hour in information industries to $0.53 in leisure and hospitality. Regionally, hourly health insurance benefits costs were an average of $1.85 in the South, $2.18 in the West, $2.40 in the Midwest, and $2.62 in the Northeast.

Total employer compensation costs for private industry workers was an average of $28.78 per hour worked and an average of $41.16 for state and local government workers in March 2012. Costs include wages, salaries, and benefits.