Overview of The Indicator from Planet Money — "No healthcare premiums? In this economy?! Here's how."
This episode (hosts Adrian Ma and NPR financial correspondent Maria Aspin) looks at employers who cover employees' health insurance premiums entirely — what that actually means, why some companies are doing it now, and the trade-offs for workers and employers. It mixes reporting from small startups (Bartesian) to large firms (Boston Consulting Group) with national data on rising health-care costs.
Main takeaways
- Employer-paid premiums can make health insurance feel “free” to employees, but it rarely means care is entirely free — deductibles, co-pays and prescriptions often remain.
- Premiums and employer health costs are rising fast: employer-sponsored coverage costs are up about 26% over the last five years (KFF). For a family of four, average annual costs approach $27,000; employees typically contribute about $7,000 of that through paycheck deductions.
- About 12% of employers offered no-premium medical plans for individual employees last year (KFF). Some large employers (e.g., Boston Consulting Group) cover premiums for employees and most family members.
- Employers that fully cover premiums often see benefits in recruitment, retention and morale. Smaller employers that do it (like Bartesian) view it as a competitive hiring tool even if it’s a big expense.
- There are trade-offs: employers may offset costs elsewhere (higher deductibles, fewer other benefits, lower salaries, or ad hoc policies like parental leave). “No-premium” can mean different packages and protections.
Examples from the episode
- Bartesian (Chicago startup, ~30 employees): founder Ryan Close (Canadian) pays all upfront premiums for medical, dental and vision for workers and families and gives $1,000/year in a flexible account for out-of-pocket costs. The company does not have a formal parental-leave policy.
- Boston Consulting Group (BCG): covers insurance premiums for U.S. employees and most family members, and works to keep co-pays low as well — a strategy BCG says reduces turnover and eases recruiting.
How “no-premium” plans typically work
- Employer pays the insurance premium so nothing (or little) is deducted from employee paychecks.
- Employees may still be responsible for:
- Deductibles (amount you pay before insurance starts covering)
- Co-pays/co-insurance (costs per visit/procedure)
- Prescription costs
- Some employers supplement with accounts (FSAs/HSAs) or reduced co-pays to lower out-of-pocket costs further.
- Employers sometimes compensate by adjusting salary, other benefits, or adopting higher cost-sharing when care is used.
Trade-offs and caveats
- Not truly “free”: out-of-pocket costs can still be significant if you need care.
- Employers can shift costs rather than eliminate them — e.g., lower salaries, reduced parental leave, or tougher limits elsewhere.
- Smaller employers face big budget impacts; sustaining generous benefits can be challenging as premiums rise.
- Policy context matters: ACA exchange premiums also rose last year because Congress didn’t extend enhanced subsidies, but employer plans affect the majority of working-age Americans.
Practical questions and action items
- For employees:
- Ask for total compensation details: premiums covered, deductibles, co-pays, prescription coverage, FSAs/HSAs, and parental leave.
- Compare total expected annual costs (paycheck deductions + typical out-of-pocket use) across offers, not just the “premium.”
- For employers considering no-premium plans:
- Model the long-term cost and recruiting/retention benefits.
- Decide whether to offset by salary or other benefits, and be transparent with employees about trade-offs.
- Consider pairing premium coverage with measures that reduce use-based costs (lower co-pays, wellness programs).
Notable lines / soundbites
- Ryan Close (Bartesian): being Canadian influenced his view — “I just probably took for granted that, oh, of course I don't pay for health care.”
- Alicia Pittman (BCG HR): covering premiums helps hiring and retention — “Healthy employees make for a productive workforce...and also a place where our teams want to come to work every day.”
Data sources cited
- KFF (Kaiser Family Foundation): employer-sponsored insurance up ~26% over five years; average family employer cost ~$27,000/year; employees pay about $7,000/year on average; ~12% of employers offered no-premium individual plans last year.
Produced by NPR’s The Indicator — a concise look at how some employers are trying to make health insurance more affordable for workers, what that actually buys employees, and the trade-offs involved.