Premium rate increase in 2012 was the lowest in six years, a new analysis finds

U.S. employees enjoyed the lowest rate of premium increases for their health benefits in six years in 2012, according to results of a new survey.

In 2012, the average rate increase for large employers was 4.9 percent, down from 8.5 percent in 2011 and 6.2 percent in 2010. Yet, it’s not time to break out the champagne – average health care premium increases are projected to jump up to 6.3 percent in 2013.

Average employee out-of-pocket costs are expected to rise to $2,429 from $2,200 this year. That means that the burden on employees will have increased more than 50 percent to $4,814 in 2013, from $3,199 in 2008. These projections were made by an Aon Hewitt analysis.

“In 2010, employers found themselves in a challenging budgetary position, thus taking more aggressive actions with their benefit plans. An expected decline in employment levels and new costs resulting from health care reform had to be factored into expected costs, which led many employers and insurers to conservatively project their health care premiums for 2011,” saidTim Nimmer, chief health care actuary at Aon Hewitt, in a news release. “As actual results materialized, employers have seen some stabilization in employment levels, less severe impact of high cost claims, a general movement towards consumer-driven plans and greater clarity around the average cost impact associated with health care reform. As a result, 2012 premiums were offset to reflect the better than expected historical experience. For 2013, we expect premium increases to gravitate back to the 6 percent range.”

But here’s how employers are trying to rein in costs, even as most plan to continue to pay for employees medical benefits and not pay a fine for not doing so when the Affordable Care Act goes into effect.

• Focus on health and wellness – Another Aon Hewitt survey shows that more and more employers are adding incentives and are tying them to a definite result as opposed to offering incentives for simply participating in a wellness program.
• Consumer-driven care design - Many employers are offering plans by which employees have are given a finite sum of money within which they have to manage their health expenses. This allows employees to play a bigger role in making healthcare decisions.
• Encourage employees to consume less healthcare -Some companies are levying charges if working spouses are also covered under employees health benefits when they could get health benefits elsewhere. Others are saving on prescription drugs by transferring employees to generics.

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