Posts Tagged ‘employer health insurance’

Health Insurance Is Going the Way of Retirement Plans

Sunday, February 16th, 2014

Just a couple decades ago, American retirement plans made a big shift from pensions to 401k’s.  Instead of receiving a defined benefit pension, workers started contributing to plans and making their own decisions about how they would receive their money.  A lot of people are forecasting a similar change in the health insurance industry over the next 5-10 years.  Right now many employers offer health insurance in a defined benefit way.  They choose the exact health insurance options and you can choose to pay for the plan or opt to buy your own individual health insurance.  Insurance News Net posted an article from The Pittsburgh Post-Gazette’s Bill Toland which says that “In 2020, Workers Will Decide (their own) Health Benefits.”

Many experts believe that the face of health insurance will change dramatically.  They forecast that people will shop online and choose the specific health insurance options that they want for themselves from private exchanges.  Companies will pay a certain stipend to their employees via a health account and that will go towards their health insurance plan costs.  If people choose a health insurance plan that is more than their employer stipend, they will have to pay the rest of the bill themselves.  They will shop in online private health insurance exchanges run by health insurers, like Highmark, or benefits consultants or brokers..  If an insurance company is running the exchange, all of the plans will be from them.  But if the exchange is run by benefits consultants or brokers, there will be plans from multiple insurance companies.  Plans will differ in prices and coverage.  Each exchange will likely offer around 6-10 different plans.

It was easier for large companies to make the pensions switch because they almost immediately saw huge cost savings.  It is a little different with the health insurance plans because although they will not see huge cost savings, they will see a large reduction in the amount of administration.  They are also offering better benefits to their employees, making them more competitive as employers.  But small and mid-sized employers will see even more benefits initially than the larger companies.  Experts predict that many smaller companies will make this switch to private exchanges in the next year and a half.  Larger companies will switch as well, but it will take a large employer like McDonalds or WalMart making the big move before many other make the jump as well.

Chicago Employers Passing On Health Insurance Increases to Employees

Thursday, October 17th, 2013

Employers are passing large health insurance increases on to their employees, larger than the increases they are even facing.  According the The Chicago Tribune’s Peter Frost, Chicago employers are increasing the percentage of health care costs paid by employees by 9% this year.  The article “Increase in employer health insurance costs at a 5-year low” points out that large employers in Chicago only saw their health insurance costs increase by 3% this year.  While it is still an increase in their costs, this is the lowest increase in the past five years.  Costs went from $10,434 annually per employee to $10,753 this year.  This Chicago specific data came from a study done by Aon Hewitt, which compiles data for 516 large companies in the United States.

The 9% employee increase comes through higher premiums and out-of-pocket expenses like co-pays, deductibles, and coinsurance.  Costs per employee went from $4,715 in 2013 to $5,135 this year.  Unfortunately for employees, their costs are expected to rise another 9% next year to $5,613.  Workers are paying 22% of their overall health care premiums, an increase of close to 20% over the past ten years.  Forty-seven percent of employers have increased employee costs related to health care in the last year.  Almost as many companies said that they plan to do so as well within the next five years.  Aon predicts the smaller employer increases ending soon and anticipates that Chicago will see a 6.6% increase in 2014, based on changes from the Affordable Care Act.

You are considered lucky if you have health insurance coverage through your employer, even with premium or out-of-pocket costs that are increasing.  If you want to compare health insurance plans and see if you can get a more affordable individual plan, Compare Health Rates can help you with that.  Make sure to compare all of the details before making any big health insurance changes.

Increase in Health Insurance Takes Bigger Bite from Paychecks

Thursday, August 22nd, 2013

I don’t think this comes as a surprise to anyone, but research confirms that health care costs are growing faster than wages.  The Kaiser Family Foundation and the Health Research & Education Trust found that employees pay 6% more for their health insurance than last year, which is three times higher than their increase in wages.  And that’s just the average.  I’m sure there are many people paying an even greater amount for their health insurance, not to mention those whose wages haven’t been increasing at all.  This is not to say that companies are being unfair however, because they are paying quite a lot more to cover their employees’ health care as well.  Compared to one decade ago, family health insurance premiums have increased by 89%.  Workers are paying $4,565 each year for their employer-sponsored health insurance, while individuals are paying around $1,000.  This information comes from CNN Money’s Tami Luhby in the article “Health insurance premiums rise faster than wages.”

Those amounts though are little in comparison to what the employers are paying.  Families are covering 28% of the total health care cost and individuals are paying only 17% of the cost.  The increase in total health care costs was around 4%, taking into account both the family or individual and employer share.  But overall wages only increased by 1.8% on average, so the health care increases take a bigger bite out of paychecks.  This study has been conducted yearly since 1999 and this year actually saw the second smallest increase in health care costs.  A slower economy is the biggest reason, but that is good news for employers and employees alike.  Employers have been trying to put more of their costs onto employees for awhile now though.  The amount of yearly deductibles as well as the number of companies making employees pay a deductible has been steadily increasing.

Something else that has become popular is offering wellness programs or discounts for employees who take steps to remain healthy.  More large companies implement these types of plans, but small companies do as well.  Companies with 50 or more workers will be required to offer health insurance plans starting next year.  But 93% of these companies are already offering health insurance to their employees.  When it comes to small employers, just over half of them are offering health insurance plans to workers.  Families at small companies pay a lot more than those at large companies for their health insurance, but the individuals at small companies actually pay less.  Individual health insurance exchanges popping up under the new health care law shouldn’t do much to change employer health insurance, unless the policies become more affordable to workers than remaining in their employer sponsored plans.

Being Unhealthy Can Cost You When it Comes to Health Insurance

Saturday, July 27th, 2013

Changes to health insurance plans have already started and the bulk of changes are still looming in the near future.  With rising costs and unhappy Americans, some employers are taking creative approaches to dealing with increasing health plan costs.  In “Your health plan: the next frontier,” Money’s Amanda Gengler tells us what we can likely expect with the future of health insurance plans.  One small company owner in Missouri made big changes when he saw skyrocketing health care costs and an increasing number of sick days being used.  He made healthy changes to the vending machines, opened a fitness center, gave free on-site check-ups, and gave big financial incentives in the form of lower deductibles and no premiums for workers who took steps to be healthy.  A big portion of increasing health care costs has been passed onto employees through higher deductibles, premiums, and co-pays.  But making healthier choices to avoid needing so much medical care is a newer way to try and save money.  It certainly benefits employees in more ways than one.

Prices vary widely from doctor to doctor, especially if you choose one that is out of network.  New plans will likely streamline your choice of doctors even more and staying in that smaller group could save you big on your premiums.  Insurers and employers save money if you don’t visit top shelf doctors who order more tests than average.  Estimates show that around 1/3 of big companies will have this type of streamlined plan by next year.  This plan might even force you to pay the entire cost of seeing an out of network doctor.  If this type of plan becomes an option to you, research what doctors and hospitals you will lose out on and see if you are happy with the replacements available.  Florida Blue says that local big-names and academic med centers aren’t usually included in these streamlined plans though.

Many companies will have you choosing your own health plan from a list they have chosen in the future.  They may pay a percentage of your plan costs or a fixed dollar amount, and the plans may even be in the private exchanges.  Plan to spend a lot more time researching plans and options and maybe even switching to a high-deductible plan to save money.  Since you will be paying a bigger percentage of your bills, employers are hoping that you will make more cost-efficient health decisions and stay healthier overall.  A healthier America may just be what it takes to lessen the increase or even decrease health care costs overall.  Expect a lot more health initiatives from your employer that could lower parts of your plan costs or offer you rewards, even cash.  But on the flip side, you might get charged more for a high BMI or high cholesterol, especially if you aren’t doing anything to change it.  The Money article has some great examples and personal stories of how health plans have changed and will continue along that road in the future.

Fewer Employers Offering Health Insurance in Florida

Saturday, April 13th, 2013

Consider yourself lucky if you still have health insurance covered by your employer.  The number of Americans with that luxury is declining fast, especially for those who work for small companies.  Florida’s Sun Sentinel just published an article about how their state compares to the national average based on a report from the State Health Access Data Assistance Center.  Maria Mallory White’s “Study: Company-paid health insurance more rare” says that Florida is below the national average when it comes to the number of people with employer-sponsored health insurance.  Compared to the national average where 52.4% of Americans have this employer coverage, only 44.1% of Florida’s companies are offering health insurance plans.  That ranks them at 45th in the nation.

This accounts for a 10% decline in both the coverage offered in Florida as well as the nation as a whole.  Losing health insurance benefits has been a steady process over a long period of time throughout the United States.  Those people losing the most ground were lower-wage workers and workers’ dependents.  The ten year study was done on workers under the age of 65 because those over 65 are eligible for Medicare insurance.  While the number of Florida residents under 65 decreased by almost 10%, the coverage for their dependents decreased by a whopping 25%.  The only state with a larger decline in dependent coverage was Mississippi.

Floridians with income below 200% of the Federal Poverty Guidelines saw a 10.4% decline in their employer-sponsored health insurance coverage.  Those with income between 200% and 400% of the Federal Poverty Guidelines saw a 6.1% decline in their coverage option.  One of the largest factors in this decrease in employer health care coverage is the size of companies.  Small companies are less likely to offer health insurance coverage to their employees.  Some larger companies are downsizing and becoming small, while small companies that were offering health insurance no longer are because of increasing costs.  Florida companies with 50 or fewer employees offer health insurance 29% of the time.  This is lower than the national average for small companies, who offer health insurance 37% of the time.  If you have lost your employer-sponsored health insurance, you can find an affordable quote from Compare Health Rates.