Kaiser: Deductibles Rising Faster Than Premiums, Part-Timers Not Rising

Insurance premiums rose 4%, deductibles are rising sharply, and few mid-size employers are changing employee job classifications from full-time to part-time to avoid providing coverage next year, the Kaiser Family Foundation/Health Research & Education Trust reported Tuesday.

The foundation’s survey of nearly 2,000 large and small employers found that insurance premiums in employer-sponsored health plans rose an average of 4% this year, an amount consistent with an average growth of 5% annually since 2005.

The 5% growth rate represents a slowdown from 1999-2005, when premiums grew an average of 11%.

The foundation reported in a press release that average single premiums now are $6,251, of which employees pay $1,071. Employees are contributing $4,955 for family premiums that average a total of $17,545. Eighty-one percent of insured employees have an annual deductible that averages $1,318, with employees in small firms of three to 199 workers paying $1,836 and employees of larger firms paying $1,105.

Deductibles have risen 67% since 2010, the year the Affordable Care Act, otherwise known as Obamacare, was signed into law. Premiums have risen 24% during that same time period.

The survey found that 57% of employers offer health benefits to some workers, about the same as last year, when it was 55%. Among firms of 200 or more workers, 98% offer coverage, compared to 47% of the firms with three to nine workers. Beginning this year, employers with at least 100 full-time equivalent employees are required to offer coverage. Next year, that requirement will fall on employers with 50 or more full-time equivalent employees.

The survey found that 5% of employers with at least 100 full-time equivalent employees are offering more comprehensive benefits this year, and 21% extended eligibility to certain groups of workers.

Only 4% of employers with 50 or more full-time equivalent employees said they changed job classifications to part-time so some employees would not be eligible for benefits next year, while 10% changed classifications so employees would become eligible.

Under the Affordable Care Act, the highest-cost health plans will be subjected to the so-called “Cadillac tax” beginning in 2018. In the survey, 53% of employers with 200 or more workers had tried to determine if their plans would qualify. Of that group, 19% had found their plan enrolling the most employees would qualify for the tax. Thirteen percent of large firms have made changes to their plans to avoid the tax, while 8% had switched to a cheaper health plan.

Among other findings was that the majority of large firms offer wellness programs, and 38% offer financial incentives for employees to participate. Meanwhile, 9% of firms say one of their plans has eliminated a hospital or health system from their network.