Annual premiums for employer-sponsored family health coverage rose 3 percent from 2013 to reach $16,834 in 2014, according to Kaiser Family Foundation/Health Research & Educational Trust 2014 Employer Health Benefits Survey.
Moderate premium growth has been a steady trend over the last few years, since the introduction of healthcare reform. However, this isn’t a direct indication of rising healthcare costs and spending.
“The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm,” Foundation President & CEO Drew Altman, PHD.
A survey of over 2,000 small and large employers provided insight into the trends employers are following in administering an employer-sponsored health plan. Aside from the small rise in premiums, most employers have concentrated on raising deductibles or developing high deductible plans to limit their risks when employees get sick.
Of the employers interviewed, 80% of all covered workers face a general annual deductible, with the average deductible reaching $1217. This has risen 47% from $826 in 2009. “Today 4 in 10 covered workers face at least a $1,000 deductible, nearly double the share from just five years ago,” continued Dr. Altman.
Employer Health Benefits & Fortune 500 Companies
For employees working for Fortune 500 companies, their share of health costs will rise slightly higher than the rest, according to a survey of chief human resource officers across the nations largest employers. The survey found the following:
78% reported a rise in health insurance costs of an average 7.7%
73% report having moved or will move employees to Consumer Directed Health Plans (CDHPs)
71% report raising or plans to raise employee contributions to health insurance
27% report cutting back health insurance coverage eligibility.
The results of both surveys continue to support the growing trend of employers responding to the health laws new provisions. Many are opting to drop the hassle of employer-sponsored coverage and default to private exchanges. Private exchange offerings typically move employees from their companies’ previous health plans to fully-insured individual arrangements, purporting to offer more flexibility and choice that can adapt to the wide-ranging needs of employees, while creating a more competitive health plan marketplace.
However, making the shift isn’t always the best solution. For employers seeking to continue to offer a rich and attractive employer health benefits, self-funding remains just as an appealing option. Self-funded health plans allow much of the same control and flexibility as the private exchanges, however it creates room for a tailored yet affordable coverage option that promotes wellness and accountability for one’s own health throughout the workforce.