Group market insurance plans had premiums increase by an average of 3 percent this year, the sixth consecutive year of a single-digit hike and well below the 20 percent jump in non-group market premiums, while employers continue to search for ways to cut costs through different sites of care and wellness programs.
According to the Kaiser Family Foundation and Health Research & Education Trust (HRET) survey, the average total cost of premiums for employer-sponsored family coverage was $18,764. Preferred provider organization (PPO) plans had slightly higher premiums than health maintenance organization (HMO) plans ($19,481 vs. $19,071).
PPOs remained the most common plan design, enrolling 48 percent of covered workers, but its share has dropped by 8 percentage points over the last five years. During the same time frame, enrollment in high-deductible health plans has risen by 9 percentage points, now enrolling 28 percent of workers. While premiums have remained relatively stable in the group market, workers are contributing more to the cost of their coverage, with their share of premiums rising 32 percent over the last five years to an average of $5,714 annually.
“This year’s findings continue a positive run of a slowing in premium increases and in the growth of health care costs overall,” Jay Bhatt, MD, president of HRET and CMO at the American Hospital Association, said in a statement. “As policymakers and providers continue to work to improve health care, ensuring it remains affordable and accessible is critically important. Wellness programs continue to be a popular way for employers to offer resources and financial incentives to their employees to help improve their overall health.”
The 151 million people relying on employer-sponsored coverage may see big differences based on their employer’s size, according to the survey. Workers at companies with fewer than 200 employees contribute an average of $1,550 more annually for family health coverage. Average deductibles are also higher at small firms, with workers covered by PPOs paying nearly double the average deductible for larger employers’ PPO plans.
The survey also found coverage at the smallest companies is “down significantly,” with 50 percent of companies with 50 or fewer employees offering health benefits in 2017. In 2012, that number was 59 percent. The Affordable Care Act (ACA) now requires companies with more than 50 full-time-equivalent workers to offer qualified health benefits or pay a tax penalty, while workers at smaller firms now have the option of using the ACA exchanges.
For providers, the survey noted several areas where employer-sponsored coverage sought to steer its covered members away from more expensive care. Wellness programs and biometric screenings have become more common, being offered in 85 percent and 52 percent of large employers’ plans, respectively.
Sixty-three percent of those large firms cover telehealth services—with a third of those companies offering some financial incentive for workers to use utilize telemedicine over a visit to the physicians’ office. Some 73 percent of larger companies cover services provided in retail clinics, but fewer among those firms (17 percent) gave workers a financial incentive for seeking care there.
Provider networks, however, seem to be safe from employers’ efforts to cut costs. The share of employers utilizing high-performance or tiered networks stood at 15 percent, similar to 2016, while only 3 percent said they eliminated a hospital or health system from their network in order in an effort to reduce costs.