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From The Business Journals

Sep 22, 2015, 2:35pm EDT
Health insurance premiums increased only moderately for most employers, but that’s partly due to workers paying higher deductibles.
 Obamacare ACA
Premiums for employer-sponsored health insurance rose an average of 4 percent this year, according to the Kaiser Family Foundation/Health Research & Educational Trust.

For employers as a whole, that continues a 10-year trend of modest increases in premiums, compared with the 11 percent annual increases, on average, they saw between 1999 and 2005.

The news wasn’t so good for businesses with fewer than 25 employees, however. Their premiums for single coverage went up nearly 11 percent in 2015 to $6,246, and their premiums for family coverage went up nearly 10 percent to $15,663.

For all employers, the average annual premium for single coverage this year is $6,251, with workers paying $1,071 of it. The average family premium is $17,545, with workers paying $4,955 of it.

Workers also are facing higher deductibles, especially if they work for smaller businesses. Deductibles averaged $1,318 for single coverage this year, but they were $1,836 for workers in businesses with fewer than 200 employees.

“With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” said Drew Altman, president and CEO of the Kaiser Family Foundation.

The findings are a based on a survey of nearly 2,000 small and large employers. The survey found that 98 percent of large businesses offer health insurance coverage to their workers, compared with 47 percent of businesses with fewer than 10 employees.

The survey also found that businesses were preparing for the Affordable Care Act’s employer mandate, which applies to companies with at least 100 full-time-equivalent employees this year, and to companies with 50 or more FTEs next year. More than 20 percent of businesses with at least 100 FTEs said they offered health insurance this year to groups of workers not previously eligible.

Among employers with 50 or more FTEs, 4 percent said they changed some jobs from full-time to less than 30 hours a week so they wouldn’t be required to cover employees in these positions. Another 4 percent said they would hire fewer full-time employees because of the cost of insurance. But 10 percent said they made some jobs full-time instead of part-time in order to enable workers to obtain coverage.

Large businesses also are preparing for the so-called “Cadillac tax” on high-cost health plans, which begins in 2018. The survey found that 53 percent of large employers have analyzed whether this tax would apply to any of their plans. Nearly 20 percent said the tax would apply to their most popular plan.

The survey found that 13 percent have made changes to their plans to avoid the Cadillac tax thresholds, and 8 percent switched to lower-cost plans.

“Those changes likely will shift costs to workers, but exactly how and how much will vary for individual workers”, said Gary Claxton, a foundation vice president and director of its Health Care Marketplace Project.

Some employers also are limiting their provider networks to reduce costs.