From the March 2016 issue of The Receivables Report for America’s Health Care Financial Managers
Deductibles increase sharply
Patients are being given a heavier burden to carry in terms of insurance benefits and it is becoming more difficult to bear, even if they have employer-sponsored benefits. This probably is no surprise to those who work within the revenue cycle, especially those who deal directly with health consumers.
Single and family premiums for employer-sponsored health insurance rose an average of 4 percent in 2015, continuing a decade-long period of moderate growth, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2015 Employer Health Benefits Survey released late last year. Since 2005, premiums have grown an average of 5 percent each year, compared to 11 percent annually between 1999 and 2005.
The average annual premium for single coverage is $6,251, of which workers on average pay $1,071. The average family premium is $17,545, with workers on average contributing $4,955.
The survey also finds that 81 percent of covered workers are in plans with a general annual deductible, which averaged $1,318 for single coverage this year. Covered workers in smaller firms (three to 199 workers) face an average deductible of $1,836 this year. That's 66 percent more than the $1,105 average deductible facing covered workers at large firms (at least 200 workers).
Size of Deductibles Up
Since 2010, both the share of workers with deductibles and the size of those deductibles have increased sharply. These two trends together result in a 67 percent increase in deductibles since 2010, much faster than the rise in single premiums (24 percent) and about seven times the rise in workers' wages (10 percent) and general inflation (9 percent).
The survey of nearly 2,000 small and large employers provides a detailed picture of the status and trends in employer-sponsored health insurance, costs and coverage, including employers' responses to provisions of the Affordable Care Act.
Employer Requirements Lead to Modest Changes in Worker Hours
In 2015, 57 percent of employers offered health benefits to at least some of their workers, statistically unchanged from 55 percent in the previous year. Offer rates vary by firm size, with 98 percent of large firms (200 or more workers) offering coverage, compared to less than half (47 percent) of the smallest firms (three to nine workers).
Beginning in 2015, employers with at least 100 full-time equivalent employees (FTEs) must offer to their full-time workers health benefits that meet minimum standards for value and affordability or pay a penalty. The requirement applies to employers with 50 or more FTEs beginning in 2016.
Of firms reporting at least 100 FTEs (or, if they did not know FTEs, of firms with at least 100 employees), 5 percent say that they offered more comprehensive benefits this year to some workers who previously were only offered a limited benefit plan, and 21 percent say that they extended eligibility to groups of workers not previously eligible.
Among employers with 50 or more FTEs (or, if they did not know how many FTEs, firms with at least 50 employees), 4 percent report that they changed some job classifications from full-time to part-time (less than 30 hours per week) so employees would not be eligible for health benefits, while 10 percent report changing some job classifications from part-time to full-time to enable workers to obtain coverage. Four percent also report reducing the number of full-time employees they planned to hire because of the cost of health benefits.
Large Employers Take Early Steps to Prepare for "Cadillac tax" in 2018
The survey provides an early look at employers' response to the Affordable Care Act's excise tax on high-cost health plans, sometimes called the "Cadillac tax," which begins in 2018.
A majority (53 percent) of large employers (200 or more workers) offering health benefits say that they conducted an analysis to determine if any of their plans would exceed the Cadillac tax thresholds, and about one in five (19 percent) of this group say their plan with the largest enrollment will exceed the threshold amount. In addition, 13 percent of large firms offering health benefits say they have made changes to their plans to avoid reaching the excise tax thresholds, and 8 percent say they switched to a lower-cost health plan.
"Our survey finds most large employers are already planning for the Cadillac tax, with some already taking steps to minimize its impact in 2018," said study lead author Gary Claxton, a Foundation vice president and director of the Health Care Marketplace Project. "Those changes likely will shift costs to workers, but exactly how and how much will vary for individual workers."
The survey also captures some steps employers have taken to limit their provider networks as a way to reduce costs: 9 percent of firms offering health benefits say that one of their plans eliminated a hospital or a health system from their network, and 7 percent offer a "narrow network" plan, generally considered more limited than the standard HMO network.
One Third of Large Firms Offer Financial Incentives for Participating in Wellness Programs
Many large employers offering health benefits offer health screening programs including health risk assessments (50 percent), which are questionnaires asking employees about lifestyle, stress, or physical health; and biometric screenings (50 percent), which are in-person health examinations conducted by a medical professional.
The survey finds that 31 percent of large employers offering health benefits have a financial incentive for employees to complete health-risk assessments, and 28 percent have an incentive for employees to complete biometric screening.
The majority of large employers continue to offer wellness programs, such as smoking cessation, weight loss, or other lifestyle coaching. Thirty-eight percent of those offering one of these wellness programs provide a financial incentive for employees to participate or complete the program. Among these firms, 15 percent offer a maximum incentive greater than $1,000 for all of a firm's health and wellness programs, including any incentives for health screening.
The annual survey is a joint project of the Kaiser Family Foundation and the Health Research & Educational Trust. The survey was conducted between January and June of 2015 and included 3,191 randomly selected, non-federal public and private firms with three or more employees (including 1,997 that responded to the full survey and 1,194 others that responded to a single question about offering coverage). For more information on the survey, see www.kff.org.
This article was originally published in the March 2016 issue of The Receivables Report for America’s Health Care Financial Managers, a monthly newsletter from Wolters Kluwer Legal and Regulatory U.S. For more information on The Receivables Report, call 1-800-638-8437 or visit www.wklawbusiness.com/store.
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