Health Care Costs Rose 4 Percent For Families In 2012: Kaiser/HRET

from Spencer’s Benefits Reports: In 2012, the average premium for family coverage was $15,745, a 4 percent increase from $15,073 in 2011, according to research from the Kaiser Family Foundation and the Health Research & Educational Trust (HRET). The 2012 Annual Employer Health Benefits Survey found that the average annual premium for single coverage in 2012 was $5,615, up 3 percent from $5,429 in 2011. Kaiser/HRET noted that since 2002, premiums have increased 97 percent, three times as fast as wages (33 percent) and inflation (28 percent).

“In terms of employee insurance costs, this year’s 4 percent increase qualifies as a good year, but it still takes a growing bite out of middle-class workers’ wages, which have been flat or falling in real terms,” said Drew Altman, president and chief executive officer of Kaiser.

Of the average premium, covered workers contributed an average of 18 percent of the premium for single coverage and 28 percent for family coverage. This is the same percentage as Kaiser/HRET found in 2011, and is relatively unchanged over the past decade, the survey noted. Workers in small firms (those with three to 199 workers) contributed a lower average percentage for single coverage compared to workers in larger firms (16 percent versus 18 percent), but a higher average percentage for family coverage (35 percent versus 25 percent).

In addition to premium costs, most covered workers face additional plan costs when they use health care services. A large share of workers in preferred provider organizations (PPOs; 77 percent) and point-of-service (POS) plans (60 percent) have a general annual deductible for single coverage that must be met before all or most services are reimbursed by the plan. However, only 30 percent of workers in health maintenance organizations (HMOs) have a general annual deductible. The survey found that the average deductible amount for single coverage is $733 for workers in PPOs, $691 for workers in HMOs, $1,014 for workers in POS plans, and $2,086 for workers in high-deductible health plans with a savings account option (CDHPs).

Health Reform

According to Kaiser/HRET, 2.9 million young adults were covered by employer plans in 2012 as a result of a provision in the Patient Protection and Affordable Care Act (ACA) that allows young adults up to age 26 without employer coverage of their own to be covered as dependents on their parents’ plan. Of the 2.9 million, 1.1 million have coverage through small firms and 1.8 million have coverage through larger firms. The survey also noted that young adult coverage has increased from 2.3 million in the 2011 survey.

Forty-eight percent of covered workers have coverage through a grandfathered plan, as defined under the ACA, down from 56 percent in 2011, Kaiser/HRET found. Grandfathered plans are exempt from some health reform requirements, including covering preventive benefits with no cost sharing and having an external appeals process. To retain this status, employers must not make significant changes to their plans to reduce benefits or increase employee costs. Of the workers that do not have coverage through a grandfathered plan (those plans are required to comply with all the ACA provisions), 27 percent are in plans that were not in effect when the ACA was enacted. Roughly similar percentages of workers are in plans where the deductibles or copayments (36 percent) or employee premium contributions (34 percent) changed more than was permitted for plans to maintain grandfathered status, the survey noted.

Kaiser/HRET also found the following:

Offer rate. Sixty-one percent of firms offered health benefits to their workers in 2012, similar to the percentage (60 percent) that offered coverage in 2011. Among firms that offer coverage, an average of 77 percent of workers are eligible for the health benefits offered by their employer. Of those eligible, 81 percent take up their employer’s coverage, resulting in 62 percent of workers in offering firms having coverage through their employer, noted Kaiser/HRET. PPOs are the most common plan type, enrolling 56 percent of covered workers. According to the survey, 19 percent of covered workers are enrolled in a CDHP, 16 percent in an HMO, and 9 percent in a POS plan.

Prescription drug coverage. Almost all covered workers (99 percent) have prescription drug coverage, and nearly all face cost sharing for their prescriptions, the survey found. In 2012, 78 percent of covered workers were in plans with three or more tiers of cost sharing.

Wellness. Employers continue to offer wellness and other programs as a benefit to their employees, according to Kaiser/HRET. Eighteen percent of employers offering health benefits ask employees to complete a health risk assessment. In addition, the majority of employers offering health benefits offered at least one of the following wellness programs in 2012 (63 percent): weight loss programs, gym membership discounts or on-site exercise facilities, biometric screening, smoking cessation programs, personal health coaching, classes in nutrition or healthy living, web-based resources for healthy living, or a wellness newsletter.

Retiree health care. Twenty-five percent of large firms (those with 200 or more workers) that offered health benefits offer retiree health benefits in 2012, similar to the percentage that did so in 2011.

Domestic partner benefits. In 2012, 31 percent of employers offered health benefits to same-sex domestic partners, up from 21 percent three years earlier. The survey also found that 37 percent of firms offered such benefits to unmarried opposite-sex partners, up from 31 percent in 2009.

The survey contains responses from 2,121 employers with three or more workers. For more information, visit http://ebhs.kff.org.

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