Average Worker’s Health Care Costs Increased Due to Out-of-Pocket Expenses; Families Hit Hardest, Nation’s Largest Benchmarking Survey Finds
Employers picked up more of individual premiums, but less of families’ premiums, in 2013, and decreased in-network coverage for both
Employers covered 18 percent more of a single employee’s health insurance premium, or $934 per employee, this year, but asked employees with dependents to pick up 3 percent more of the family premium, $492 on average, according to the 2013 UBA Health Plan Survey, the nation’s largest independent benefits benchmarking survey, released today. The average worker, however, saw an overall increase in health care cost due to rising out-of-pocket costs, including higher in-network deductibles, in-network co-insurance, and significantly higher out-of-pocket maximums.
An employee’s portion of an employer-sponsored health plan decreased by 15.7 percent, this year, or $592 on average for a single employee. Government/education sector employees benefitted the most, where single employee contribution decreased nearly 30 percent, or $1,025, since 2012; taxpayers, therefore, assumed an additional $1,681 or 24.28 percent of a public employee’s health care cost.
In the same time period, in-network deductibles increased $91 to $1,852 for a single and $216 to $4,225 for a family. Out-of-Pocket Maximums (after the deductible) for in-network increased $152 to $3,641 for a single and $433 to $8,043 for a family – increasing more than 17 times from five years ago. The survey also shows that the average in-network co-insurance dropped from 90 percent to 80 percent, a significant decrease in coverage.
“This is the first year, in my 22 year career in the industry, that employers took back some of the premiums they were asking employees to pay, a good indication they are looking to attract and retain top talent as the economy picks up,” says Thom Mangan, CEO of UBA. “Unfortunately, dependents are being asked to pick up more of the tab, which could signal an increasing anti-family trend.”
“But neither are employers willing to “pay and dump” employees into a public exchange,” says Mangan. The survey shows that only 3 percent of employers offered a payoff in 2012 and 3.5 percent in 2013. Of those to whom it was offered, only 20 percent accepted it in 2012 and 23 percent in 2013. The average monthly bonus offered was $127 per month for a single and $154 for a family.
Other important trends from the survey show:
- PPOs continue to be the most popular plan type offered, up from 46.9% in 2012 to 47.2 percent in 2013. The number of HMO’s decreased slightly, from 19.1 to 18.4 percent. CDHP plans grew the most from 22.5 to 24.1 percent for all industries and all size groups.
- Self-Insurance has increased 10 percent, this year, as a funding option for insurance plans.
- Though other plan components hit employees and families hard, co-pay increases didn’t materially impact them: The average PCP copay went from $25 to $26, specialist co-pay rose from $36 to $37, urgent care co-pays held steady at $52 and the ER co-pay rose $9 to an average of $152.
- Families got hit the hardest with cost increases, that is, if they even have coverage through their employer: only 48.4 percent of health plans offer dependent coverage which was only a .4 percent increase from the prior year.
The State of Wellness in the Workforce
The UBA survey finds that wellness is growing overall, with 19.2 percent of all employers offering a wellness plan, an 8.3 percent increase this year. However, types of wellness offerings vary by industry and employer size. Surprisingly, employers with 1,000-plus employees decreased their wellness offerings by .7 percent.
Of the 19.2 percent of employers offering a wellness plan, nearly 60 percent are using their insurance company, which is a 6 percent increase, while the other 40 percent are using an independent wellness firm, a decrease of almost 8 percent. Incentives and rewards declined 4.7 percent this year, but are still included in 62 percent of wellness plans, and gift certificates or paid health club dues declined by 11.4 percent but are still included in 46 percent of wellness plans. Trends indicate that the most effective type of wellness strategy includes coaching, which increased 9.5 percent and now makes up 56 percent of all wellness plans offered.
“The foundation of health insurance has always been wrong,” says Mangan. “We have treated health insurance as a way to care for a person once they are sick. Employers and their covered employees have to turn the system upside down and design their health plans to keep people healthy in order for health insurance trends to bend in the reverse direction. Workers Compensation and Safety Management is engrained in the culture of nearly every major corporation; most manufacturers employ Safety Engineers and have a corporate culture that celebrates their lack of claims resulting in negative Workers Compensation Premium Inflation. Until this happens in the Health Insurance field, Medical Insurance Inflation will continue to outstrip wages by multiples of 3 to 5 times every year.”
About the UBA Health Plan Survey
Data in the 2013 UBA Health Plan Survey is based on responses from 10,551 employers sponsoring 16,928 health plans nationwide. This unparalleled number of reported plans is nearly three times larger than the next two of the nation’s largest health plan benchmarking surveys combined. The resulting volume of data provides employers of all sizes more detailed — and therefore more meaningful — benchmarks and trends than any other source.
The survey’s focus is intended to provide a current snapshot of the nation’s employers rather than covered employees. Results are applicable to the small to midsize companies that comprise approximately 98 percent of the nation’s 5 million-plus employers, as well as to larger employers, providing benchmarking data on a more detailed level than any other survey.
The 2013 UBA Health Plan Survey offers more than national data and recommends that employers benchmark with local data, which is more effective when adjusting plan design, negotiating rates, and communicating value to employees. Contact a UBA Partner Firm for a customized benchmark survey based on industry, region and business size.
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About United Benefit Advisors
United Benefit Advisors is the nation’s leading independent employee benefits organization with more than 200 offices throughout the U.S., Canada and the U.K. Visit www.UBAbenefits.com .