Employer Health Plan Premiums See Modest Increase, Survey Finds
Premiums for employer-sponsored health plans increased by 3% from 2013 to 2014, according to the Kaiser Family Foundation's 2014 Employer Health Benefits Survey released Wednesday, the New York Times' "The Upshot" reports (Sanger-Katz, "The Upshot," New York Times, 9/10).
KFF conducted the survey in partnership with the Health Research and Educational Trust. It included responses from 3,139 private and public companies with at least three employees (Terhune, Los Angeles Times, 9/10).
The increase was tied for the smallest rise since KFF began conducting the annual survey 16 years ago. According to "The Upshot," employer health plans' premiums had been growing by double-digit percentages annually, creating issues such as:
- Employers discontinuing to offer health plans; and
- Premiums growing faster than employees' incomes ("The Upshot," New York Times, 9/10).
With the increase, the average cost for an employer-sponsored family health plan is now $16,834. Employees were responsible for covering about $4,823, or 29%, of that cost. Meanwhile, the average cost of employer-sponsored plans for individuals increased by 2%, to $6,025 (Wilde Mathews, Wall Street Journal, 9/10). According to the Washington Post's "Wonkblog," the increase tracks closely with increases in employees' incomes and inflation from 2013 to 2014.
Average Deductibles Increase
The survey also found an increase in the average deductible those covered by employer health plans must meet before their insurance coverage begins. According to the survey, 80% of those with employer-sponsored coverage faced average deductibles of $1,217, up from $826 in 2009. Specifically, the survey found that:
- 41% of all companies that offer health insurance had plans with average deductibles of at least $1,000, up from 10% in 2006; and
- 18% of the companies offered plans with average deductibles of at least $2,000, up from 3% in 2006.
Larger firms tended to have plans with lower deductibles, while smaller firms tended to offer plans with higher deductibles, according to "Wonkblog" (Millman, "Wonkblog," Washington Post, 9/10).
KFF Vice President and study lead author Gary Claxton said, "The deductibles for workers have crept higher over time," adding that the amount of workers facing deductibles of at least $1,000 has "nearly double[d] ... from just five years ago" (Viebeck, The Hill, 9/10). Claxton said that employees' deductibles will likely keep increasing as employers look for ways to curb health care costs (O'Donnell, USA Today, 9/10).
Reasons for Slowdown
While it is difficult to pinpoint the exact reasons for the slowdown in premium growth, experts point to a similar slowdown in overall health spending. Because consumers with employer-sponsored coverage comprise the largest portion of the insurance market, the larger slowdown could affect premiums ("The Upshot," New York Times, 9/10). According to the Los Angeles Times, employers provided health benefits to about 150 million U.S. residents last year.
In addition, it is unclear whether the trend will continue. Pacific Business Group on Health Executive Director for National Health Policy Bill Kramer said, "Large employers are skeptical the current low trends will continue for a variety of reasons," adding, "Historically, periods of slow growth have always been followed by rapid increases" (Los Angeles Times, 9/10).
Number of Employers Offering Health Plans Drops
Meanwhile, the survey found that the percentage of employers offering health plans declined slightly, from 57% in 2013 to 55% in 2014. Still, 92% of employers with at least 50 employees offered health plans this year, according to the poll ("Wonkblog," Washington Post, 9/10). In addition, 94% of firms with at least 100 employees offered coverage options (The Hill, 9/10).
ACA Not Having Much of an Effect
According to Politico, the results show that the Affordable Care Act so far has not had a large effect on employer-sponsored coverage. KFF President Drew Altman said that the "extraordinarily modest" increases show that concerns that "the sky would fall" under the ACA are unfounded.
However, it is unclear how the law will affect businesses in coming years as new requirements and regulatory changes affect the health industry. Brookings Institution Senior Fellow Stuart Butler said that if the insurance exchanges created under the ACA "sort themselves out and operate more smoothly and a larger number of people are in them, you're going to see more and more small firms shutting down or not starting to offer coverage" (Norman, Politico, 9/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.