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Family Insurance Premiums Up For 2nd Year In Row

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Other findings include:

"One of the changes in this report is the growth in deductibles," said economist Paul Ginsburg of the Center for Studying Health System Change, a nonpartisan research group in Washington.  The deductibles were likely "a factor behind the premium increase being as low as it was."

Workers in small firms with three to 199 employees face an average annual deductible of $1,715 compared with $884 for those in larger firms.

Small businesses generally see more volatile insurance premium rates than larger firms. Scott Hauge, who runs an insurance brokerage firm in California, says his clients have seen increases averaging around 10 percent a year for the past seven years. He doesn't dispute the findings of the survey, but added that "small businesses are not seeing those minor increases."

Analysts say premium increases are cyclical, with periods of rapid increases, such as the double-digit hikes that marked the late 1980s and the early 2000s, followed by periods of slower growth. Since about the mid-2000s, rate increases paid by employers fell below 10 percent each year, with the smallest annual growth tracked at 3 percent in the 2009-2010 employer survey. In what surprised many analysts, rates jumped by 9 percent from 2010 to 2011 before moderating the past two years to around 4 percent.

Some employers say changes associated with the health law, such as a provision allowing adult children to stay on their parents’ plans until age 26, are adding costs.

"We're all seeing it," said Forrest Cook, vice president of human resources at NCP Solutions, a 350-employee company in Birmingham, Ala. "We have around a 5 percent to 6 percent increase this year. Before that, our costs held steady for about three or four years."

Cook was also concerned with the uncertainty surrounding the health law, such as the year delay in the requirement that large employers provide health coverage or pay a penalty.

His firm does not require workers to pay a large sum before their insurance kicks in because "when you have a high deductible plan, it's going to discourage people from using it," Cook said.

But the firm is enthusiastic about wellness programs, as are 35 percent of employers in the survey, who consider them an effective strategy for controlling costs. Such programs range widely, from providing small gifts to employees for filling out a health risk questionnaire, to offering large reductions in premiums for workers who get screened and meet certain goals for weight, blood pressure, cholesterol or blood sugar. The federal health law allows employers to increase those financial incentives from 20 percent of the cost of the health coverage to 30 percent.

NCP offers workers financial incentives to participate in wellness programs, including getting flu shots and checking for such things as high blood pressure. Those who sign up for a stop-smoking class get credit for paid time off, Cook said.  And the firm discusses health costs with workers.

Tue, Aug 20 2013

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