The 2017 United Benefit Advisors Health Plan Survey, an annual benchmarking report on US employer-sponsored health insurance plans, shows premium renewal rates (the comparison of similar plan rates year over year) for employer plans rising 6.6 percent over last year, significantly above the five-year average increase of 5.6 percent. The highest premium increases were seen in Connecticut (24 percent) and New York (14 percent), but some states actually saw premiums fall, such as Washington state, where they dropped by 10 percent.
Overall, the survey points to a spike in employee health insurance costs throughout the country, while employees are bearing a larger share of the costs:
Average employee premiums for all employer-sponsored plans rose from $509 in 2016 for single coverage to $532 in 2017 and from $1,236 to $1,272 for family coverage (a 4.5% and 3% increase respectively). Average annual total costs per employee increased from $9,727 to $9,935. However, the employee share of total costs rose 5% from $3,378 to $3,550, while the employer’s share rose less than 1%, from $6,350 to $6,401.
The survey, which focuses on small and mid-size employers, also registered a notable increase in the number of these companies pursuing self-funded health care. UBA President Peter Weber comments on the reason for this:
In the face of growing health care costs and an uncertain future for the Affordable Care Act, many US employers are looking for new ways to provide quality health benefits for their employees at a reasonable cost. At Employee Benefit News, Paul Johnson recommends that small and mid-sized employers, in particular, consider self-funded plans as an alternative to traditional group health insurance:
To balance the scales and create a competitive advantage, more companies are turning to healthcare plans based on a self-funding model that offer more flexibility, customization and cost-savings while still improving the quality of care. Self-funded plans have been almost universal among large employers for quite some time, yet only in recent years have more HR departments at small- and mid-sized companies started to realize the benefits. …
Unlike more rigid traditional insurance, companies can customize their offerings to address specific needs, such as investing in injury and chiropractic care in industries that require physical labor to robust maternity benefits for those with younger workforces.
Another increasingly popular option is value-based care. Also at EBN, Sam Ho and Tim Cappel explain how value-based health care programs work and why employers are choosing them: