Survey: Employees are facing modest premium increases—but skyrocketing out-of-pocket costs

KFF surveyed nearly 2,000 employers

See the Advisory Board's take on how to think about your own employee health plan

Businesses increasingly are shifting more health care costs onto their employees, according to an annual Kaiser Family Foundation (KFF) survey.

Survey details, findings

For the survey, KFF and the Health Research & Educational Trust polled nearly 2,000 employers between January and June.

According to the survey, premiums for employer-sponsored health plans rose modestly this year, with average annual premiums for:

  • Individual plans increasing by 4%, to about $6,250; and
  • Family plans increasing by 4%, to $17,545.

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The survey found that workers' average annual premium contributions in 2015 are $1,071 for individual coverage and $4,955 for family coverage.

Meanwhile, researchers found that deductibles and the percentage of employees enrolled in high-deductible health plans increased at a more rapid pace. According to the survey, about 24% of workers with employer-sponsored coverage are enrolled in high-deductible plans with health savings accounts in 2015, up from 20% in 2014 and just 4% in 2006.

And the average deductible for health plans among all workers with employer-sponsored coverage has reached $1,077 this year, compared with $646 in 2010 and just $303 in 2006.

How to prepare for high-deductible health plan patients

Among individual plans, the average annual deductible is $1,318 in 2015, an 8.3% increase compared with last year. Employees at small businesses—defined as having between three and 199 workers—have average deductibles of about $1,800 annually.

Further, the survey found that:

  • One in five workers has a deductible of $2,000 or more; and
  • 46% of workers with individual health plans has deductibles of at least $1,000.

KFF President and CEO Drew Altman says the increase in deductibles has helped to rein in premium growth for the last few years.

Employers preparing for 'Cadillac Tax'

Meanwhile, the survey also found that some employers are starting to make changes to their health benefits ahead of the implementation of the Affordable Care Act's (ACA) so-called "Cadillac tax," which is scheduled to take effect in 2018.

Under the ACA, most employer-sponsored health plans with annual premiums of more than $10,200 for individuals or $27,500 for families would pay a 40% excise tax on the portion of the premiums that exceeds those thresholds.

According to the survey, 13% of large firms—defined as those with 200 or more workers—said they have made changes to their employee health plans to avoid reaching the tax threshold. For example, 8% of large firms said they switched to a lower-cost plan.

Meanwhile, 53% of large firms said they have conducted analyses to determine what effect, if any, the tax would have (Murphy, AP/Washington Times, 9/22; KFF 2015 Employer Health Benefits survey, 9/22; Herman, Modern Healthcare, 9/22; Wilde Mathews, Wall Street Journal, 9/22; Abelson, New York Times, 9/22; Young , CQ HealthBeat, 9/22 [subscription required]).

How to think about your own employee health plan

Kate Vonderhaar, HR Advancement Center

For years, the primary objectives of a health care organization’s employee health benefits plan have been to reduce costs and improve employee health. Organizations increasingly have a third objective: using the employee health plan to demonstrate they can improve outcomes and control costs for a defined population (their own employees).

If you want to use your employee health plan to demonstrate your organization’s expertise in population health management—which you can use in contracting discussions with other employers and payers—you’ll need to change your approach to wellness. Promoting healthy lifestyles among employees can improve engagement and productivity, but it’s not going to reduce the total cost of care. To do that, you need to have distinct care management strategies for different employees, depending on whether they’re at high, medium, or low risk of utilization.

Download our infographic to learn more.

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