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Weeks Worked to Afford a Health Care Plan: Exploring the Cost

Employee Benefits
Article
08/26/2016

Every industrialized country in the world offers some type of universal health care to its citizens except for one: the United States. And although the U.S. government spent an average of $9,086 per person on health care in 2013, Americans are still feeling the pinch when it comes to paying their share of employer-based plans. Deductibles and other forms of cost-sharing, especially for individuals or families with low income levels, can eat up a chunk of a worker’s paycheck.

So what does it take for workers to pay for their health care plans? Using Bureau of Labor Statistics (BLS) wage data and the Pew Trusts State Employee Health Care Report, we crunched the numbers to calculate how many weeks of work on average it takes for employees in various occupations, industries, and states to earn enough to cover their medical care plans. What portion of various people’s paychecks are funneled to health care expenses? Keep reading for a unique take on this controversial topic.

Health Care Cost and Wages, by Industry

Most and leas time worked to pay for an employee health care plan, by industry

Breaking down earnings by industry allowed us to calculate the number of hours per month and weeks per year employees must work to fund their health care plans. Who needs to clock the most hours? Workers in the food prep and serving business. An average health plan eats up over two weeks’ worth of wages per year for an individual and over seven weeks per year for a family. To put it into perspective, that’s over five times more hours worked than the industry that requires the fewest hours to fund care. Pay in the food service industry has long been a hot-button issue. In 2015, the average cook earned just over $10 per hour, while servers averaged just under $9. But although servers tend to supplement their wages with tips, cooks do not.

On the other hand, employees in the Management of Companies and Enterprises sector work the fewest hours to fund their health plan: less than half a week per year for an individual and nearly 1.5 weeks for a family. Workers in the computer and mathematical, legal, and architecture and engineering fields also need to funnel less-than-average payments toward health care costs.

Health Care Cost and Wages, by Occupation

Most and least time worked to pay for an employee health care plan, by occupation

After examining industry data, we zoomed in on specific occupations to see who must work the most to afford health care. As with the industry statistics, this data set reveals that food workers fare the worst. Seven of the 10 occupations in the worst financial shape to fund insurance plans are in that field, including dishwashers, bartenders, and food preparation workers.

However, hosts and hostesses top the chart, with a need to work an average of over four weeks per year for an individual and nearly 15 weeks for a family to afford care. Of the occupations not in the food industry that also must work long hours to fund health plans, there are ushers/lobby attendants/ticket takers, cashiers, and childcare workers.

The top 5 jobs that require the least amount of work hours to fund health care plans are in the medical and dental field. Other jobs that need relatively few hours to pay for plans include marketing managers, judges, and air traffic controllers.

Individuals: Weeks Worked for Health Care, by State

Most weeks worked to pay for an employee health care plan for individuals, by state

The above chart maps regional variations in how many weeks on average employees must work to pay for their individual (with no dependents) health care plans. Overall, states in the upper Midwest, along with Texas and Oklahoma, divert the lowest funds toward health plans. Much of the West, Northeast, and South must earmark more money for insurance.

Hawaii is the top spot. It takes workers there an average of three weeks of work per year to pay for health plans. In Hawaii, known for its high cost of living, the most common jobs are not the highest paying: Administrative support, food prep and serving, and retail are the top three industries. One recent survey revealed that nearly half of Hawaii residents live paycheck to paycheck – and 9 out of 10 respondents cited a concern with low wages. Louisiana comes in second, followed by Indiana, California, and Tennessee.

Families: Weeks Worked for Health Care, by State

Most weeks worked to pay for an employee health care plan for families, by state

Next, we looked at how long different states’ employees must work to pay for health plans for their families rather than just themselves. North Carolina comes out on top, averaging over nine weeks of work to fund health insurance. In North Carolina, employers pay the brunt of the cost for employee-only coverage, but employees are completely responsible for the added cost of coverage for dependents. Kentucky comes in second, averaging almost nine weeks, followed by Hawaii and Mississippi.

Individuals: Weeks Worked for Health Care, by Metro Area

Most weeks worked to pay for an employee health care plan by metropolitan area for individuals

Looking at metropolitan areas (with over 1 million residents), rather than states, provides a slightly different picture. Six of the top 20 spots that must work the most to fund individual (no dependent) insurance plans are located in California. In the No. 1 spot is Riverside–San Bernardino–Ontario, where employees on average must allot nearly three weeks’ worth of wages per year toward health plans. New Orleans comes in second, and Indianapolis claims third.

Families: Weeks Worked for Health Care, by Metro Area

Most weeks worked to pay for an employee health care plan by metropolitan area for families

Adding dependents into the mix changes the breakdown. Workers in Raleigh, NC, take an average of over eight weeks of work per year to pay for health plans that include dependents. As mentioned above, in North Carolina, employees are responsible for covering the cost difference for adding dependents to a plan. New Orleans again takes second place, and the Buffalo area of New York comes in third.

Mapping Weeks Worked, by Occupation

Occupations that work the most weeks for an employee health care plan in each state

We put all the information together to get some very specific insights into who must work the most to fund health care in every state. To pay for an individual plan, a childcare worker in Hawaii averages over six weeks of work per year, a forest and conservation worker in California needs just over five, and a shampooer in Indiana requires nearly five.

To fund a plan with dependents, gaming dealers in North Carolina average 17.4 weeks of work per year, a childcare worker in Hawaii averages 17.3 weeks, and a fast food worker in Kentucky averages almost 16 weeks.

Mapping Weeks Worked, by Industry

Mapping Weeks Worked, by Industry

Finally, we zoomed out from occupations to look at industries as a whole. In the vast majority of the country, food service employees must work the most to fund health plans. In California, Arizona, and Florida, the farming/fishing/forestry industry surpassed the food industry, and in Nevada and Texas, the personal care and service industry took first place.

Funding an individual plan takes 4.9 weeks of work per year for food service workers in Hawaii. Food service workers in Indiana take 4.6 weeks, while farming/fishing/forestry employees in California need nearly 4.8. To fund a family plan, it takes North Carolina workers in the food service industry 16.4 weeks, Kentucky food workers nearly 15 weeks, and Hawaii food service employees almost 14 weeks.

Making the Most of Employment Benefits

As our study shows, it can take a great deal of work time to pay for health insurance – especially for workers in certain occupations, industries, and states. Employer-sponsored insurance is key to the current American health care system, as it makes health care accessible to more people and protects individuals and families from crippling medical costs. However, in recent years, the average cost of insuring each employee and dependent has doubled – meaning employers are feeling the pinch as well as employees.

At Paychex, we’re happy to share these insights on the cost of employee benefits in hopes that you find the information both interesting and relevant. Our numerous HR solutions – from payroll to benefits administration – can help you run your business as efficiently as possible.

Methodology
As part of this research, BLS Wage Data from May 2015 for the median hourly wage by industry, occupation, state, and metropolitan area were used to calculate the findings. The median weekly wage was determined by multiplying the median hourly wage by 40.

For industry and occupation calculations, the national average employee contribution for individuals and individuals and dependents per month from the Pew Trusts State Employee Health Care Report was used. For metropolitan area and state calculations, we used the state data. For the metropolitan area assets, only areas with at least 1 million residents were calculated.

Sources

http://www.pewtrusts.org/~/media/assets/2014/08/stateemployeehealthcarereportseptemberupdate.pdf

http://www.bls.gov/bls/blswage.htm

Textual Sources

http://www.pnhp.org/news/2013/june/unraveling-the-crisis-in-american-healthcare

http://www.cnbc.com/2015/10/08/us-health-care-spending-is-high-results-arenot-so-good.html

http://www.commonwealthfund.org/publications/issue-briefs/2015/nov/how-high-health-care-burden

http://www.hawaiinewsnow.com/story/31595253/survey-almost-half-of-hawaii-residents-live-paycheck-to-paycheck

https://www.washingtonpost.com/news/wonk/wp/2015/08/20/theres-a-serious-problem-with-how-restaurants-pay-their-staff/

 

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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