Annual family premiums for employer-sponsored health insurance rose an average of three percent to $18,142 this year, a time when workers' wages rose 2.5 percent) and inflation was up 1.1 percent, according to the Kaiser Family Foundation/Health Research & Educational Trust (“HRET”) 2016 Employer Health Benefits Survey. Workers on average contributed $5,277 annually toward their family premiums.
This year's family premium increase was similar to last year's (four percent) and reflected a significant slowdown over the past 15 years. Since 2011, average family premiums have increased 20 percent, more slowly than the previous five years (31 percent increase from 2006 and 2011) and more slowly than the five years before that (63 percent from 2001 to 2006).
“We're seeing premiums rising at historically slow rates, which helps workers and employers alike, but it's made possible in part by the more rapid rise in the deductibles workers must pay,” said the Kaiser Family Foundation's president and chief executive officer, Drew Altman.
The recent trend in part reflected covered workers moving into high-deductible plans compatible with health savings accounts (“HSAs”) or tied to health reimbursement arrangements (“HRAs”). These plans had lower average premiums than other plan types.
In 2016, 29 percent of all workers were in such plans, up from 20 percent in 2014, while a shrinking share of workers (48 percent in 2016, down from 58 percent in 2014) were enrolled in preferred provider organization (“PPO”) plans, which had higher-than-average premiums. These shifts effectively reduced the average premium increase by half a percentage point in each of the past two years, the analysis showed.
Again, partly as a result of this trend, the survey found average deductibles continuing to rise for covered workers. In 2016, 83 percent of covered workers faced a deductible for single coverage, which averaged $1,478. That was up $159 or 12 percent from 2015, and $486 or 49 percent since 2011. The average deductible for workers who faced one was higher for workers in small firms (three to 199 employers) than in large firms ($2,069 vs. $1,238).
For the first time, the survey also found half (51 percent) of all covered workers faced deductibles of at least $1,000 annually for single coverage. This included two thirds (65 percent) of workers at small firms (three-199 workers), who typically faced higher deductibles than workers at large firms (200 or more workers).
In some cases, employers made contributions to tax-preferred HSAs or HRAs, which workers could use to pay part or all of their deductible expenses, thereby reducing their effective deductible. Counting employer contributions this way would reduce the share of covered workers with deductibles of at least $1,000 to 38 percent.
Learn more: http://www.hret.org.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].