Agency for Healthcare 

Medical Expenditure Panel Survey Research and Quality 

STATISTICAL BRIEF #55 

September 2004 

Employee Contributions to EmployerSponsored Health Insurance Coverage, 

1997 versus 2002 

Beth Levin Crimmel, MS 

Introduction 

Firms that offer health insurance coverage to their employees vary in 

the degree to which they subsidize that coverage. Employees who 

obtain employer-sponsored insurance may be required to contribute 

nothing toward the premium cost, pay the entire premium, or share 

the cost with the firm. This Statistical Brief, based on estimates from 

the Insurance Component of the Medical Expenditure Panel Survey 

(MEPS-IC), shows the changes in employee contributions for both 

single and family (for a family of four) coverage from 1997 to 2002 in 

the private sector of the economy. Changes for employees working 

for small (fewer than 50 employees) and large (50 employees or 

more) firms are analyzed. All differences between estimates discussed in the text are statistically significant at the 0.05 level. 

Findings 

Overall, the portion of private sector employees enrolled in single 

coverage health insurance plans who did not contribute to the plan 

premium fell from 37.6 percent in 1997 to 26.6 percent in 2002 

(figure 1). There was also a decline for those enrolled in family 

coverage; the percentage of employees enrolled in family coverage 

who did not contribute to the plan premium dropped from 18.5 

percent in 1997 to 14.8 percent in 2002. 

Large firms, which employ about 72 percent of private sector workers 

(data not shown), had a much larger drop in the portion of employees not contributing to single coverage, from 29.3 percent in 1997 to 

17.5 percent in 2002, than small firms, from 60.0 percent in 1997 to 

56.3 percent in 2002. 

For employees of small firms, the percentage with a family plan who 

did not contribute to their premium actually rose from 1997 (36.6 

percent) to 2002 (41.4 percent), in contrast to the overall trend. In 

large firms, the portion of employees with a family plan who did not 

contribute fell from 14.4 percent in 1997 to 9.7 percent in 2002. 

Among enrolled employees (which includes those contributing to 

their premium and those not contributing), the percentage of the total 

Highlights 

� The portion of private 

sector employees enrolled 

in single coverage health 

insurance plans who did 

not contribute to the plan 

premium fell from 37.6 

percent in 1997 to 26.6 

percent in 2002. 

� There was also a decline 

for those enrolled in family 

coverage; 18.5 percent of 

employees enrolled in 

family plans made no contribution to their premium in 

1997 versus 14.8 percent 

in 2002. 

� Among enrolled employees 

(which includes those 

contributing to their 

premium and those not 

contributing), the percentage of the total single 

premium they contributed 

rose from 15.6 percent in 

1997 to 17.7 percent in 

2002. Conversely, however, the percentage 

contributed overall toward 

the premium by those 

enrolled in family plans did 

not change significantly 

over the five-year period. 

� Actual dollar employee 

contributions were up 

across the board between 

1997 and 2002, with dollar 

contributions rising about 

four to six times faster than 

the overall inflation rate. 
single premium they contributed rose from 15.6 percent in 1997 to 17.7 percent in 2002 (figure 2). Conversely, however, the percentage contributed overall toward the premium by those enrolled in family 

plans did not change significantly over the five-year period. Employees of large private sector firms paid a 

larger portion of their single premium in 2002 than in 1997; the percentage for small firms was basically 

unchanged over the period. For family coverage, while the employees of small firms paid a smaller 

portion of their premium in 2002 than in 1997, the portion paid in large firms did not vary. 

Although the change in the percentage that employees contributed toward premiums varied by coverage 

type and firm size over the period, actual dollar employee contributions were up across the board. Dollar 

increases rose about four to six times faster than the overall inflation rate of 12.1 percent from 1997 to 

2002, as measured by the Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers. 

For example, the average annual contribution for enrolled employees with single coverage in 2002 was 

$565, up nearly 77 percent from $320 in 1997 (figures 3 and 4). The average annual contribution for 

family plans rose 52.3 percent, from $1,305 in 1997 to $1,987 in 2002. In small firms, the average dollar 

contribution increased 68.7 percent for single coverage and 51.1 percent for family coverage over the 

five-year period. Large firms showed a jump of 77.5 percent in the average single contribution and 53.0 

percent in the average family contribution. 

From 1997 to 2002, the annual contribution for single coverage for the average paying enrollee (which 

excludes those making no contribution) in the private sector was up 50.1 percent to $770. Family plan 

annual contributions for the average paying enrollee increased 45.7 percent to $2,332 in 2002. (Data not 

shown.) 

Data Source 

The statistics in this brief are from the 1997 and 2002 MEPS-IC. All information comes from tables 

available on the MEPS Web site (www.meps.ahrq.gov).

Definitions 

Employer 

A particular workplace or physical location where business is conducted or services or industrial 

operations are performed. In this brief, only private sector employer data are reported. 

Employee 

A person on the actual payroll. This excludes temporary and contract workers but includes the owner or 

manager if that person works at the firm. 

Enrollee 

An employee who is enrolled in a health insurance plan offered by the employer. Enrollees do not include 

any dependents covered by the plan. 

Firm 

A business entity comprising one or more business establishments under common ownership or control. 

A firm represents the entire organization, including the company headquarters and all divisions, 

subsidiaries, and branches. A firm may consist of a single-location establishment, in which case the 

establishment and firm are identical. A small firm has fewer than 50 employees; a large firm has 50 or 

more employees. 

Health insurance plan 

An insurance contract that provides hospital and/or physician coverage to an employee for an agreedupon fee for a defined benefit period, usually a year. 

Premium 

Agreed-upon fees paid for coverage of medical benefits for a defined benefit period. Premiums can be 

paid by employers, unions, employees, or shared by the insured individual and the plan sponsor. 

Single coverage 

Health insurance that covers the employee only. 
Family coverage 

Health insurance that covers the employee and the employee’s family. If a plan offers more than one 

pricing level for family coverage, information for a family of four was reported. 

About MEPS-IC 

MEPS-IC is a survey of business establishments and governments that collects information on employersponsored health insurance, such as whether insurance is offered, enrollments, types of plans, and 

premiums. The survey is conducted annually by the U.S. Bureau of the Census under the sponsorship of 

the Agency for Healthcare Research and Quality. The yearly response rate has averaged 78 percent for 

in-scope sample units. Approximately 4 percent of the original sample has been out-of-scope in a typical 

year. 

For more information on this survey, see MEPS Methodology Reports 6, 8, and 10 under MEPS 

publications at http://www.meps.ahrq.gov/mepsweb/data_stats/publications.jsp and the MEPS-IC

Technical Appendix at http://www.meps.ahrq.gov/mepsweb/survey_comp/ic_technical_notes.jsp.

Suggested Citation 

Crimmel, B.L. Employee Contributions to Employer-Sponsored Health Insurance Coverage, 1997 versus 

2002. Statistical Brief #55. September 2004. Agency for Healthcare Research and Quality, Rockville, MD. 

http://www.meps.ahrq.gov/papers/st55/stat55.pdf 
Medical Expenditure Panel Survey, 1997 and 2002 

60.0 

29.3 

18.5 

14.8 14.4

41.4 

9.7 

37.6 36.6 

17.5 

56.3 

26.6 

0 

25 

50 

75 

All Small Large All Small Large 

1997 2002 

Single coverage, by firm size Family coverage, by firm size 

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the 

Figure 1: Percentage of enrolled employees not required to contribute to health 

insurance premium, by coverage type and firm size, private sector, 1997and 2002 

Medical Expenditure Panel Survey, 1997 and 2002 

13.5 

24.5 

27.5 

23.8 

17.7 

16.4 15.6 

23.1 

25.3 

23.5 

14.2 

18.9 

0 

10 

20 

30 

All Small Large All Small Large 

1997 2002 

Single coverage, by firm size Family coverage, by firm size 

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the 

Figure 2. Percentage of total premium for health insurance contributed by enrolled 

employees, by coverage type and firm size, private sector, 1997 and 2002 
Medical Expenditure Panel Survey, 1997 and 2002 

320 

565 479 

1987 

2155 

1955 

1278 

1426 

1305 

333 284 

591 

0 

500 

1000 

1500 

2000 

2500 

All Small Large All Small Large 

1997 2002 

Single coverage, by firm size Family coverage, by firm size 

Dollars 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the 

Figure 3. Average enrolled employee annual contribution to health insurance 

premium, by coverage type and firm size, private sector, 1997 and 2002 

Medical Expenditure Panel Survey, 1997 and 2002 

private sector, 1997 to 2002 

76.6 

68.7 

77.5 

52.3 51.1 53.0 

0 

25 

50 

75 

100 

All Small Large All Small Large 

Single coverage, by firm size Family coverage, by firm size 

Percent 

Source: Center for Financing, Access, and Cost Trends, AHRQ, Insurance Component of the 

Figure 4. Percentage increase in average annual contribution per enrolled 

employee to health insurance premium, by coverage type and firm size,