The typical family of four with employer coverage spends $18,750 per year (12% of their $157,039 income) on health.

Direct Spending on Healthcare

The typical family with employer coverage spends $18,750 per year (12% of their $157,039 income) on health. This includes $3,200 (2% of their income) in out-of-pocket health spending, $4,400 (3% of their income) in health insurance premiums, and approximately $11,150 (7% of their income) in state and federal taxes that fund health programs. 

Additional Contributions by Employers

Workers are not taxed on contributions their employers make towards health insurance premiums. Economists generally believe that employer contributions offset wages. In this scenario, we estimate that the employer is contributing and additional $13,050 to health insurance premiums, as well as $2,300 in Medicare payroll taxes. These amounts are not shown in the above chart, but economists generally believe that they offset wages. 

When combined, this family’s spending on health care and the money spent by their employer on their behalf totals $34,100.