US Employeesponsored Healthcare Market

U.S. Employee-sponsored Healthcare Market Size

U.S. Employee-sponsored Healthcare Market was valued at USD 586.7 billion in 2023 and is expected to exhibit growth at a CAGR of 3% from 2024 – 2032 period. Increased availability of telehealth services, employer’s desire to attract and retain talent and growing awareness of health and wellness are among the key attributes anticipated to spur the market growth over the forecast period.

Employers are increasingly investing in health plans that include preventive care and chronic disease management to keep employees healthy and reduce long-term healthcare costs. Healthier employees are more productive and have lower absenteeism rates. For instance, according to the data published by Centers for Disease Control and Prevention (CDC) in 2021, productivity losses linked to absenteeism cost employers USD 225.8 billion annually or USD 1,685 per employee in the U.S. Additionally, employees are seeking more comprehensive benefits packages. A survey by the Society for Human Resource Management (SHRM) found that 95% of employees rated health insurance as the most important benefit.

Moreover, wellness programs are becoming a staple of employee benefits. A 2021 report by the Kaiser Family Foundation noted that 53% of small firms and 81% of large firms that offer health benefits also provide at least one wellness program. Wellness programs contribute to overall health and can include activities like smoking cessation, weight management, and fitness programs, which can lead to reduced healthcare costs and improved employee health.

Employee-sponsored healthcare refers to health insurance plans provided by employers to their employees as part of a benefits package. These plans can cover a range of medical services, including preventive care, hospitalization, prescription drugs, and wellness programs.

U.S. Employee-sponsored Healthcare Market Trends

Improved data integration allows for better tracking of health outcomes and the effectiveness of employee health programs, leading to more informed decision-making and cost savings. Electronic health records (EHR) and data integration enhance the coordination of care and streamline health management.

• Predictive analytics can improve health outcomes and reduce costs by predicting chronic disease onset and tailoring interventions. AI and predictive analytics are being used to personalize employee health plans and identify potential health risks. A survey by HealthITAnalytics found that 93% of healthcare organizations believe predictive analytics is crucial for future healthcare management.
  
• Digital health apps provide employees with tools for managing health conditions, mental health support, and overall wellness. In a survey by Mercer found that 59% of employers offered access to digital health management tools in 2021, up from 52% in 2020. Further as per the data reported by The Business Group on Health, 86% of large employers offered tele-mental health services in 2021, highlighting the growing recognition of mental health as a critical component of employee health benefits.
  

U.S. Employee-sponsored Healthcare Market Analysis

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Based on service, the market is classified into healthcare and wellness. The healthcare segment dominated the market and was valued at USD 563.9 billion in 2023.

• Healthcare costs continue to rise, prompting employers to seek effective ways to provide coverage. For instance, according to the Kaiser Family Foundation, annual family premiums for employer-sponsored health insurance increased by 4% in 2021, reaching an average of USD 22,221.
  
• Increasing prevalence of chronic diseases such as diabetes, heart disease, and cancer are becoming more common, driving the need for comprehensive healthcare coverage. Managing chronic diseases requires ongoing medical attention and care, increasing the demand for robust health insurance plans.
  
• Employees highly value comprehensive health benefits, which are a key factor in job satisfaction and retention. Offering robust healthcare plans can enhance an employer's ability to attract and retain top talent.
  

Based on network type, the U.S. employee-sponsored healthcare market is categorized into open network plans and closed-network plans. The open network plans segment held leading revenue share of around 57.3% in 2023.

• Open network plans enable easier access to specialists without requiring referrals, which is a significant advantage for employees who need specialized care. This convenience and direct access to a broader network of providers drive the popularity of open network plans.
  
• Open network plans, such as Preferred Provider Organizations (PPOs) and Point of Service (POS) plans, offer greater flexibility by allowing employees to see any healthcare provider, including out-of-network providers, though at higher costs. This flexibility is highly valued by employees who seek a wider range of healthcare options.

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Based on organization size, the U.S. employee-sponsored healthcare market is segmented into large-scale organization, medium-scale organization, and small-scale organization. The large-scale organization segment held majority share in the market in 2023 and is anticipated to reach USD 361.9 billion by the end of forecast period.

• Large-scale organizations typically have diverse employee populations, including different age groups, health conditions, and family structures. They require comprehensive healthcare plans that address a wide range of needs. Most of the large firms offer health benefits, with many providing extensive coverage including dental and vision plans.
  
• Large organizations are increasingly integrating advanced healthcare solutions, such as telehealth and digital health platforms, into their employee benefits packages. Moreover, large employers are increasingly emphasizing wellness and preventive care programs to improve employee health and reduce long-term healthcare costs.

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The East South-Central employee-sponsored healthcare market accounted for USD 149.6 billion revenue in 2023 and is anticipated to grow at a healthy pace between 2024 – 2032 period.

• Substantial percentage of the East South-Central region is rural, where access to healthcare providers can be limited. This increases the need for employee-sponsored plans that offer broader network access and telehealth services. Telehealth has seen increased adoption in this region, driven by the need to provide healthcare access to remote and underserved areas.
  
• The high prevalence of chronic diseases in the regional states is among a key factor driving the market growth. The region has some of the highest rates of chronic diseases in the U.S., including diabetes, heart disease, and obesity. For instance, as per the 2021 data reported by The Centers for Disease Control and Prevention (CDC), Mississippi and Alabama have among the highest obesity rates in the country, at around 40.8% and 39.9%, respectively.
  

U.S. Employee-sponsored Healthcare Market Share

The U.S. employee-sponsored healthcare industry is characterized by the presence of several leading players and a focus on technology adoption and strategic partnerships. Industry players are focusing on several strategic areas to enhance their offerings, meet evolving client needs, and remain competitive. Further, product customization, integration of digital solutions, collaboration with healthcare facilities, and acquisition are key focus areas of market participants.

U.S. Employee-sponsored Healthcare Market Companies

Prominent players operating in the industry include:

• Anthem Insurance Companies, Inc.
• Blue Cross Blue Shield Association
• Cigna
• ComPsych
• EXOS
• Highmark Inc.
• Health Net of California, Inc.
• Independence Blue Cross
• Kaiser Foundation Health Plan, Inc.
• Marino Wellness
• Nationwide Medical Insurance
• Privia Health
• United HealthCare Services, Inc.
• UPMC HEALTH PLAN, INC.
• Virgin Pulse
• Wellsource, Inc.
  

U.S. Employee-sponsored Healthcare Industry News:

• In Feb 2024, Cigna HealthCare collaborated with HelloFresh to deliver meal kits to customers under its employer plans. This new plan will improve the employee's health benefits through discounted meal kit subscriptions and receiving fresh, pre-portioned ingredients from HelloFresh.
  
• In August 2021, CareFirst of Maryland, Inc. and Highmark Inc., launched Union Blue, health insurance specifically focused on labor unions, through their new collaboration. The solution offers quality healthcare administration to the family members of labor. This strategic development enabled the companies to tap new customers and improve their sales prospect.
  

U.S. employee-sponsored healthcare market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue in USD Million from 2021 – 2032 for the following segments:

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Market, By Service

• Healthcare
  • Self-coverage
  • Family coverage 
• Wellness

Market, By Network Type

• Open network plans
• Closed-network plans

Market, By Organization Size

• Large-scale organization
• Medium-scale organization
• Small-scale organization

The above information is provided for the following zones:

• East North Central
• West South Central
• South Atlantic
• North East
• East South Central
• West North Central
• Pacific Central
• Mountain States