Good News! Insurance Premium Increases Slowing Down in 2014
As we can expect, health care costs increase in 2014, which in turn means a growth in rate for employees covered by their employers. However, the good news is, the rise in premiums is not as extreme as it has been in the past. Let’s take a look at the changes we can expect to see in regards to health care cost as well as how employers are helping to lower the increase in premiums for employees.
The benefits of covering preventive health care and sick individuals, as required by the Affordable Care Act, does come at a cost, a higher one. But that alone is not the only reason for increased rates, just the underlying cost of health alone aids in the inflated prices. According to the article, "Expect Health-Insurance Premiums to Rise," via The Wall Street Journal, a study shows that of the companies that provide health care coverage to their employees, 80% of those firms raised deductibles or other charges to help offset costs.
Another study provided in the same article above conducted by Towers Watson and the National Business Group of Health, finds that employees are covering more of their own health care costs than ever before. This research shows on average employees covered under an employer-provided health care plan may see premiums rise upwards to 7%, which is roughly $2,975 annually. When all is said and done, employees are covering nearly 37% of premiums this year.
This year, the cost of providing health benefits to employees results in a 4.4% increase, last year the change was 4.1%. Considering the history of rising costs, which at one point was an increase of 10%, this is a moderate increase.
As emphasized in the article, "Employer-Sponsored Family Health Premiums Rise a Modest 4 Percent in 2013, National Benchmark Employer Survey Finds," by Kaiser Family Foundation, “the slow growth in premiums also means that fewer employer plans are likely to be subject to the ACA’s high-cost plan tax that takes effect in 2018. The Congressional Budget Office recently reduced its estimate of the number of plans that would trigger the tax, and a continued low growth rate could further reduce the impact of this provision.”
While premiums this year do not drastically change like in years past, employers are still looking for ways to help their employees with health care coverage. Kaiser Family Foundation and HRET found that wellness programs help offset health care cost increases. As a matter of fact, 35% of the 2,000 small and large employers surveyed suggest that wellness programs serve as an effective incentive, especially if there is a financial gain like lower premiums or deductibles as some employers suggest.
While we can’t expect to see a tremendous slowdown in health care costs, there are ways in which employers can help reduce the rising rates. Want to learn how? Contact BenefitMall so you can connect with an informed insurance broker who will help you and your employees choose the health care plan best suited for your company.