Payers

Report: Workers squeezed even more in employer-based health benefits

A Kaiser Family Foundation report highlights how healthcare cost growth continue to outstrip wage growth as the prevalence of high-deductible plans continue to tick up.

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Healthcare costs remain a chronic headache for employers, but workers are the group increasingly baring the brunt of cost hikes, according to the Kaiser Family Foundation’s (KFF) 20th annual employer survey on health benefits.

Employer-based healthcare is still where a majority of Americans get their healthcare, accounting for the coverage of 152 million people. But as costs and premiums continue to jump up year-over-year, companies are looking at cost cutting measures and higher employee contributions to make up the difference.

“Rising healthcare costs absolutely remain a burden for employers, but there are bigger problems for workers as their cost sharing has been rising much faster than their wages,” KFF CEO and President Drew Altman said in a media briefing about the report.

Workers are facing both rising premiums as well as increasing deductibles. On average, an employee pays $5,500 a year for their health plan premium. In addition, 85 percent of workers are now on a plan with a general annual deductible with average deductibles doubling over the past decade from $735 to $1,573.

That calculates to an effective 212 percent increase for the average worker, equivalent to eight times the average increase in worker wages during the same time period. The increasing average deductible means that more workers face high deductibles as a initial barrier to care and most health services.

In 2018, premiums average $19,616 annually for a single family policy, a 4.5 percent increase from just last year. Employers contribute on average $14,069 of per cost, a little more than 70 percent.

Of course there’s wide variation to those annual premiums, around 15 percent of covered workers are in a plan with a premium above $24,000 and 9 percent in a plan with under $14,000 premiums.

There’s also a wide gap in employee contribution between single and family coverage. On average, workers pay 18 percent of the premiums in single coverage versus 29 percent of the premiums for family coverage.

In a bid to control costs, employers have sought out ways to promote the use of less expensive health care options like retail clinics or technology-based health solutions through methods such as lower cost sharing, contributions to the employee’s health savings account or even cash or gift card prizes

The percentage of large companies (200 or more workers) covering who’s plans cover retail clinics has increased from 47 percent in 2010 to 76 percent in 2018.

While 60 percent of workers are covered by their company’s health plan, a larger proportion of companies are offering incentives for workers to enroll in a spouse’s plan or not participate in their own company’s health benefits.

Another growth area is coverage for telemedicine services, which among large firms has reached 74 percent, up more than 10 percent from 2017. A major issue though is that actual utilization of these technologies has remained low and workers much prefer visiting a doctor’s office than using telehealth services.

Technology is also a major factor in how companies are trying to gain information and data about the health status of their workforce.

Most large companies now offer health benefits offering the ability to receive a Health Risk Assessment or Biometric Screening which is able to highlight risk factors and determine health status for workers. Additionally, one out of five large employers collect data from workers’ mobile apps or wearable devices.

These data collection methods are used by companies to target health promotion programs, design new wellness programs and determine and measure specific costs, according to the report.

Photo: adventtr, Getty Images

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