How much does health insurance cost? Comparison of premiums in administrative and survey data

Using newly available administrative data from the IRS, this paper studies the distribution of employer-sponsored health insurance premiums. Previous estimates, in contrast, were almost exclusively from household surveys. After correcting for coverage limitations of IRS data, we find average premiums for employer-sponsored plans are roughly $1,000 higher in IRS records than in the Current Population Survey. The downward bias in the CPS results from underestimating premiums of married workers and topcoding of high premiums. •Using IRS data, we estimate the employer-sponsored health insurance costs.•Average premiums are roughly $1,000 higher in IRS records than in survey data.•For middle-income workers, this represents approximately 2% of total compensation.