June 2019

Lost compensation claims value the economic losses associated with employment that is eliminated, interrupted or reduced because of improper employment decisions or environments, personal injury or wrongful death, or other changes in employment circumstances associated with civil litigation.  In many cases, the loss of employer provided healthcare is a material component of these claims.

One element of these damages has historically occurred because individual health insurance (insurance you purchase on your own) was usually more expensive than group health insurance (insurance you generally obtain through your employer).  However, recent data suggests that the 2010 Patient Protection and Affordable Care Act has reduced the cost of many individual health insurance plans.  As a result, damages related to lost health benefits may be small or nonexistent in cases where the employer facilitates participation in a group health care plan but does not fund health care costs (i.e. where the full cost of health insurance premiums is a deduction from employee pay rather than covered by the employer as a benefit).

The following table reports the average monthly premium cost of individual health insurance and group health insurance in 2018 using comparative data published by eHealth.  The individual health insurance data is based on the average premium cost of individual and family health insurance plan selections made at eHealth.com by unsubsidized shoppers during the Affordable Care Act’s 2018 open enrollment period.  The group health insurance data is based on the average premium for employer-based health insurance in 2018 provided by the Kaiser Family Foundation (the 2018 Employer Health Benefits Survey).

CoverageIndividual Health InsuranceGroup Health Insurance
Single$440 / month$574 / month
Family$1,168 / month$1,634 / month

Using the above data in a lost compensation claim suggests there are no damages related to lost health benefits where the Plaintiff previously obtained health insurance through his/her employer plan and purchased individual insurance after employment was altered.  Again, this comparison assumes, among other things, that (i) the Plaintiff was paying for the insurance premium offered through his/her company, and (ii) on average, the health plan coverage is similar.

Given that a proper lost health benefits calculation considers the comparative out-of-pocket cost to the Plaintiff, the change is also relevant when performing a calculation where the Plaintiff’s employer previously covered a portion of the health care costs as a benefit.  In these cases, damages may be reduced in the comparison, but are still an important consideration.  According to the Kaiser Family Foundation data, covered workers pay for an average of approximately 18% and 29% of the premiums for single and family coverage respectively.

The percentage of the premium covered workers pay generally varies by factors such as size and type of company and can materially affect the damages conclusion.  The following tables summarizes data published by the Kaiser Family Foundation data in 2018:

Single Coverage: % of covered workers in a plan in which worker pays:
Company Size0% of premiumMore than 0%, <= 25% of premiumMore than 25%, <= 50% of premiumMore than 50% of premium
Small Companies (3 – 199 workers)27%44%25%3%
Large Companies (200 or more workers)6%71%22%1%
Family Coverage: % of covered workers in a plan in which worker pays:
Company Size0% of premiumMore than 0%, <= 25% of premiumMore than 25%, <= 50% of premiumMore than 50% of premium
Small Companies (3 – 199 workers)8%31%27%34%
Large Companies (200 or more workers)1%58%33%8%

Applying these percentages to the group health insurance numbers in the initial table can reduce the employee’s previously expected out of pocket cost to well below that of individual health insurance.  A proper damages calculation will consider the premium or portion of the premium Plaintiff was paying or expected to pay versus comparable individual insurance.

Fulcrum Inquiry assists lawyers with personal injury and employment damages through both direct employment of damage expert witnesses and with our interactive settlement tool.