7 trends in employer health benefits
According to the Kaiser Family Foundation and the Health Research and Educational Trust, employer-sponsored insurance covers about 149 million nonelderly people in the United States. An annual Employer Health Benefits Survey analyzing the trends in employer-sponsored health coverage, including health benefit offer rates, eligibility and participation, the cost of coverage, employer opinions and more, reveals how participation and cost of employer health benefits have changed in 2014.
The KFF and HRET survey includes almost 3,000 interviews with non-federal public and private firms. Data accounts for the size of firms and the plan types offered by the firms to compile and evaluate its extensive findings. The following lists key findings from the survey regarding employer health benefits in 2014.
1. Companies offering health benefits largely unchanged. The survey reports that 55 percent of all firms offered health benefits in 2014, which is similar to that of 2013 and 2012 (57 and 61 percent, respectively). According to KFF and HRET, almost all large firms of 200 or more workers offer health benefits to a least a portion of its employees, while small firms are less likely to do so.
2. Employee participation hold steady. The KFF and HRET survey indicates that in 2014, 77 percent of employees in firms offering health benefits are eligible for the coverage offered by their employer, and 80 percent of workers eligible for employer coverage elected to accept it, which is the same rate as 2013.
The rate of coverage among employees varies significantly by the type of industry. While 80 percent of workers in firms offering health benefits in the transportation/communications/utilities industry are covered, only 37 percent of workers in retail firms offering health benefits are covered by their employers.
3. Premium costs for a single worker flat, family coverage up 3 percent. While the average annual premium for single coverage employer-sponsored health insurance in 2014 is statistically similar to that of 2013, the average family premium increased by 3 percent since last year. The average annual premiums for employer-sponsored health insurance in 2014 are $6,025 for single coverage and $16,834 for family coverage ($502 and $1,403 a month, respectively). The survey findings show that family premiums have increased by 69 percent since 2004, and workers pay an average of $4,823 towards the cost of family health coverage.
Additionally, average family premiums for workers in small firms of 3 to 199 works are notably lower than average family premiums for workers in firms with 200 or more workers ($15,849 and $17,265 respectively), according to the report.
4. Cost of deductibles on the rise. According to the survey, 80 percent of covered workers face an annual deductible for single coverage, up two percent since last year and 17 percent since 2009. While the deductibles vary by plan type and firm size, the average annual deductible in 2014 is $1,217, a $391 and 47 percent increase since 2009.
Forty-one percent of all covered workers face an annual deductible of at least $1,000, and 18 percent face a deductible of at least $2,000 this year, according to the report.
5. Retiree health benefits a less common occurrence. The KFF and HRET survey reveals that the overall percentage of firms offering retiree coverage has decreased over time. Twenty-five percent of large firms offered health benefits for retiree coverage to their employers in 2014, while 28 percent of large firms offered these benefits in 2013. While that decrease doesn't reflect a significant decline, the rate of retiree health benefits offered has significantly decreased in the past 8 to 16 years: 34 percent in 2006 and 66 percent in 1998, according to the report.
6. Employers weigh in. Employer opinions and experiences offer new strategies for reducing cost and improving the quality of the benefits they offer their employees.
According to the survey, 28 percent of firms offering health benefits reported they believe wellness programs would be an effective method of containing the cost of health insurance.
Fifty-eight percent of firms that offer health benefits reported shopping for a new health plan or insurance carrier in the past year and among these, 27 percent changed insurance carriers. The largest sized firms (1,000 to 4,999 employees) were not as likely to shop, the survey found.
Private exchanges, or marketplaces that allow employees to choose between several health benefits options, have recently stimulated a lot of interest. Some exchanges allow workers to choose from multiple carriers, while some allow workers to choose between plans within one predetermined provider. According to the survey, 3 percent of covered workers at large firms currently receive coverage through a private exchange, and 13 percent of large firms offering health benefits are considering using a private exchange.
7. PPACA imposes more coverage requirements for employers. Beginning in 2015, firms of at least 100 full-time employees could face penalties if they do not offer health benefits and subsidized coverage through the new insurance exchanges. According to KFF and HRET, 94 percent of employers with at least 100 employees currently offer health benefits to eligible employees. Penalties will be extended to firms with at least 50 full-time employees by 2016.
Other impacts of the PPACA include fewer grandfathered plans, shorter waiting periods, and the encouragement of considering alternative options for retiree health benefits.
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