Premiums for employer-provided group medical benefits continued to soar for small and medium accounts, according to a survey which found the marketplace becoming more receptive to consumer-driven health plans (CDHPs).
The findings, in the semi-annual survey of employee benefits brokers conducted by The Council of Insurance Agents & Brokers, showed that few group medical accounts experienced stable or decreasing premiums during the last six months.
CIAB said for small accounts, 48 percent reported premium hikes of between 10 and 20 percent; 12 percent reported hikes between 20 and 30 percent; and 22 percent experienced increases of between 1 and 10 percent.
Forty-eight percent of medium accounts also reported premium increases of 10-20 percent, with 12 percent up from 20-30 percent and 37 percent increasing 1-10 percent.
The survey showed a slightly more moderate increase for large accounts, with 45 percent reporting premium hikes of up to 10 percent and 31 percent experiencing increases in the 10-20 percent range. There was no change in premium levels for 7 percent of the large accounts between November and May, the survey found.
CIAB represents the leading commercial insurance brokers in the country who annually write more than 80 percent of commercial property/casualty premiums and administer billions in employee benefit accounts.
In response to open-ended questions about marketplace trends, a number of the benefits brokers indicated that some employers appear to be adjusting deductibles and making other changes in employee health coverages in preparation for a move to consumer-driven plans.
Consumer-driven plans are widely touted as a way to reduce health care spending by making the patients more aware of the true cost of medical care. At the same time, they may offer employers some relief from sky-rocketing health care costs if coupled with health reimbursement arrangements (HRAs) or health savings accounts (HSAs) to which employers contribute a set amount.
"Employers and carriers are embracing cost-sharing measures (in-network deductibles and co-insurance, higher hospital co-pays, etc.) to reduce impact of renewal and ready themselves for adoption of a consumer-driven health care platform," according to a survey response CIAB said came from an unidentified benefits broker from the Northeast.
Other benefits brokers reported high interest in the consumer-driven health plans and a lot of discussion about the high-deductible insurance plans that can be coupled with HSAs, but employers still are not signing up in large numbers.
Nonetheless, the brokers reported that changes in plans to increase the employee deductible and services requiring employee co-pays were signs that the market is preparing for a change-over.
Among the reasons that employers are not embracing the CDHP/HSA option currently, the brokers said, is that there is not much difference between the cost of high-deductible health plans and HMOs or traditional insurance plans with a higher co-pay.
"The cost for a $30 co-pay plan is still too close to the HSA plans," one broker commented.
When employers do offer a high-deductible health plan coupled with an HSA, the brokers said in about 60 percent of the cases it is included as a plan option rather than as a replacement of an existing plan. The most common employer contribution to an HSA is $250-$499. That contribution level was reported by one-third of the brokers surveyed.
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