The Kaiser Family Foundation/Health Research & Educational Trust reported that employer-sponsored family health premiums increased by 4% this year, and exceeded $16,000 for the first time.
Annual family premiums now average $16,351, with workers paying on average $4,565 toward the cost of their health insurance coverage.
The 2013 Employer Health Benefits Survey, which was released on Tuesday, August 20th, revealed that general inflation rose by 1.1% and workers wages by 1.8% during the same period.
In other words, employer-sponsored family health premiums rose much more than inflation and wages.
The authors of the report commented, however, that by historical standards this year’s increase in premiums is comparatively moderate.
Employer health premiums have risen by over 80% since 2003, compared to just 31% for wages and 27% inflation.
Kaiser President and CEO Drew Altman, Ph.D., said:
“We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers.”
Maulik Joshi, Dr.P.H., president of the Kaiser Family Foundation/Health Research & Educational Trust, said “Ensuring that workers have access to affordable coverage is important for our health care system and slower premium growth is supporting that. Wellness programs are an exciting component of this process with employers offering resources to employees that help improve their overall health – our ultimate goal.”
The survey involved more than 2,000 large and small companies. The journal Health Affairs is publishing selected findings from the study.
The survey revealed that:
Employers with at least 35% of their workers earning $23,000 or less per year require their employees to pay on average $1,363 more toward family premiums, compared to employers with fewer lower-wage workers.
Employers with a relatively higher percentage of lower wage workers offer less costly coverage too. This creates a large disparity in how much of the premium the worker has to pay.
In 2013, seventy-eight percent of all workers with health insurance coverage face a general annual deductible, compared to 72% last year. In general, employees have to pay this deductible in advance.
The average deductive in 2013 is $1,135 for worker-only coverage, compared to $1,097 last year. Not a significant difference.
Deductibles of $1,000 or more are more common in employer-sponsored plans, especially in smaller companies.
Thirty-eight percent of all workers with health cover face a deductible of $1,000 or more. In smaller firms, 58% face such a deductible. Thirty-one percent of workers in smaller firms face deductibles of $2,000 or more, compared to just 12% in 2008.
Wellness Programs and Financial Incentives
Thirty-five percent of employers this year said that employee wellness programs “are a very effective strategy for controlling costs”.
Almost all employers with 200 workers or more offer at least one wellness program. These programs can take many forms and target a wide range of conditions.
Thirty-six percent of large employers that offer wellness programs also include financial incentives for employees to participate, such as a lower deductible or cheaper premiums, gift cards, receiving a larger contribution to a tax-preferred savings account, or other direct incentives.
Fifty-five percent of large employers that offer health benefits offer some kind of biometric screening to measure employees’ health risks. Eleven percent of these employers either penalize or reward employees financially depending on what their biometric outcomes are.
The Affordable Care Act (ACA)
The ACA makes preventive care—including family planning and related services—more accessible and affordable for many Americans. It also offers financial incentives to encourage workers to improve their health status.
Kaiser Vice President Gary Claxton, the study’s lead investigator and director of the Foundation’s Health Care Marketplace Project, said “This will be an important issue to watch next year, as employers will have more flexibility and could ask workers to pay more because of their lifestyles and health conditions.”
The percentage of workers covered by “grandfathered” plans dropped by 12 percent over the past year (from 48 percent to 36 percent). This means that there are more workers who are benefiting from some of the health law’s reforms affecting the employer market.
Since premiums are rising at a slow rate, the number of employers subject to the ACA’s 2018 high-cost plan tax won’t be that high.
The survey also evaluated employer interest in private health insurance exchanges – providing an extensive range of plans for their employees to choose from. In total, 29 percent of employers with over 5,000 staff members said that they would consider a private exchange.
Offer rates – this year’s survey revealed that 57 percent of firms are offering health benefits to their employees. Almost all firms with more than 200 workers offer health benefits – the larger the firm the more likely they offer some form of health benefit.
The survey included 2,948 randomly selected, non-federal public and private firms. Visit here for more information on the survey methodology.
Health care – America spends more and gets less
The United States spends a much higher percentage of its GDP (gross domestic product) on health care than any other country in the world. So, why do populations in its major industrialized rivals have such better health?