According to a new survey (pdf) conducted by the Kaiser Family Foundation/Health Research & Educational Trust (HRET), the average annual cost of health care premiums for employer-sponsored health insurance rose 3% for single coverage and 4% for family coverage in 2012. Although premiums rose at a faster rate than both wages (1.7% rise) and general inflation (2.3% rise), this year’s premium increase is “strikingly low” according to Kaiser’s President and CEO Drew Altman. Specifically, the survey found that the average annual 2012 premiums for employer-sponsored coverage were $5,615 for single coverage and $15,745 for family coverage. While the premium rise was relatively low compared to prior years, it “still takes a growing bite out of middle-class workers’ wages, which have been flat or falling in real terms,” said Altman in a press release.
The full report spans 242 pages, and addresses such topics as health care costs, health benefit offer rates, plan coverage and eligibility, enrollment patterns, premiums, employee cost sharing, prescription drug benefits, retiree health benefits, wellness benefits, the use of biometric screening, domestic partner benefits, emergency room cost sharing, and stop-loss coverage for self-funded plans. As discussed in the report’s summary, (pdf) notable findings include the following:
- Availability of Employer Sponsored Coverage. 61% of responding employers offered their employees health benefits in 2012, compared to 60% of those surveyed in 2011. The larger the firm, the more likely it was to offer health coverage.
- Grandfathered Health Plans. The survey reports that the number of workers with grandfathered health plans declined significantly (72% to 48%) from 2011 to 2012.
- Plan Enrollment. The most common form of employer-provided health plan was a PPO, which accounted for 56% of plan coverage. High deductible health plans with a savings option (HDHP/SO) accounted for 19% of enrollment; HMOs accounted for 16%; POS plans for 9%, and conventional plans accounted for less than 1% of plan enrollment.
- Employee Cost Sharing. According to the survey, 34% of employees with health coverage participated in a plan with a deductible of at least $1,000 for single coverage.
- Retiree Coverage. 25% of employers with 200 or more employees that provide health coverage offered health benefits to their retirees, a number that is relatively unchanged from 2011, but is part of a downward trend.
- Domestic Partner Benefits. This year, an estimated 31% of employers offered health benefits to same-sex domestic partners, up from 21% in 2009. In addition, the survey found that 37% of employers offered such benefits to unmarried opposite-sex partners, up from 31% t in 2009.
- Flexible Spending Accounts and Pre-Tax Premiums. The larger the employer, the more likely it was to allow employees to pay their share of premiums with pre-tax income, and contribute pre-tax dollars to Flexible Spending Accounts.
- High-Deductible Plans. The survey noted that “for the first time since 2009, the percentage of covered workers enrolled in high deductible health plans with a savings option did not increase significantly versus the previous year.”
- Wellness Programs. The 2012 survey added a number of new questions related to employee wellness programs. In general, the survey found that larger employers (200 or more employees) were more likely to offer wellness programs than smaller firms (94% vs. 63%). In addition, 18% of employers that offer health benefits ask employees to complete a health risk assessment. As expected, larger employers were more likely to do so than smaller employers (38% vs. 18%). 63% of the large firms that required employees to complete a health risk assessment provided a financial incentive to employees to encourage them to complete the assessment or appraisal. Nearly three-quarters (73%) of employers that offer wellness programs claimed that such programs were effective in improving employee health, while slightly more than half (52%) claimed that wellness programs were effective in reducing health care costs.
The survey was based on responses provided by 2,121 randomly selected public and private employers with three or more workers. A section-by-section breakdown of the survey findings and a list of accompanying exhibits can be found here.