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Family Premiums Up 3% in 2010, but Workers' Share Rose 14%
One in four insured workers face annual deductibles of $1,000 or more

By Stephen Miller  9/10/2010
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In 2010, U.S. employees on average paid nearly $4,000 toward the cost of family health coverage—an increase of 14 percent, or $482, above what they paid in 2009, according to the benchmark 2010 Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research Educational Trust (HRET).

The jump occurred as the total premiums for family coverage, including what employers contribute, rose a modest 3 percent to $13,770 on average in 2010, the survey found. In general, the amount employers contributed for family coverage did not increase. In addition, the survey showed that:

Preferred-provider organizations (PPOs) continue to dominate the employer market, enrolling 58 percent of covered workers. Average PPO family premiums topped $14,000 annually in 2010.

Since 2005, workers’ contributions to premiums have gone up 47 percent, while overall premiums have risen 27 percent. Wages have increased 18 percent, and inflation has gone up 12 percent.

Higher Deductibles

Many employers are raising the annual deductibles that workers must pay before their health plans begin to share most health care costs. The survey revealed that:

A total of 27 percent of covered workers in the U.S. faced annual deductibles of at least $1,000 in 2010, up from 22 percent in 2009.

• Among small firms (3-199 workers), 46 percent face such deductibles.

"With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles and other cost sharing," Kaiser President and CEO Drew Altman said. "This may be helping to stem the rapid rise in premiums that we saw in the early 2000s," Altman noted. However, "from a consumer perspective, the cost of health insurance just keeps going up faster than wages."

The recession contributed to the shift in burden to workers. In response to the economic downturn, 30 percent of employers said they reduced the scope of health benefits or increased cost sharing and 23 percent reported increasing the amount employees pay for coverage, the survey found.

Consumer-Directed Plans

Aside from PPOs, only consumer-directed plans (high-deductible plans that include a tax-preferred savings option such as a health savings account or health reimbursement arrangement) saw growth in their market share. Such plans enrolled 13 percent of covered workers in 2010, up from 8 percent the prior year.

Similarly, United Benefit Advisors' 2010 UBA Health Plan Survey found that consumer-directed health plans provided health coverage for 12.4 percent of all insured U.S. employees (see Consumer-Directed Plan Growth Continued in 2010).

"Consumer-driven plans have clearly established a foothold in the employer market, tripling their market share from 4 percent in 2006 to 13 percent today," said study lead author Gary Claxton, a Kaiser vice president and director of the Healthcare Marketplace Project.

Additional Highlights

Other findings from the survey include:

Single coverage. The survey tracked the premiums for worker-only health benefits, which increased 5 percent in 2010 to reach $5,049 annually. Workers on average paid $899 annually for single coverage, up from $779 in 2009. Overall, 47 percent of covered workers were in single coverage plans.

Physician office visits. Among covered workers with a co-payment for in-network physician office visits, the average co-payment increased a small but statistically significant amount from 2009 to 2010—from $20 to $22 for primary care and from $28 to $31 for specialty care.

Mental health benefits. In response to the 2008 Mental Health Parity and Addiction Equity Act, 31 percent of firms with more than 50 workers made changes to the mental health benefits they offer. Most of this group eliminated limits on coverage to comply with the law, though a small share (5 percent of those making changes) dropped mental health coverage.

Wellness benefits. About three-fourths (74 percent) of employers offering health benefits offered at least one of the following wellness programs: weight loss program, gym membership discounts or on-site exercise facilities, smoking cessation program, personal health coaching, classes in nutrition or healthy living, web-based resources for healthy living, wellness newsletter.

Health risk assessments. Among firms offering coverage, 11 percent give their employees the option of completing a health risk assessment to help employees identify potential health risks. In this group, 22 percent—or a relatively small 2 percent of all employers—offer financial incentives such as lowering the worker’s share of premiums or offering merchandise, gift cards, travel or cash to their workers. Large firms are more likely than small firms to offer assessments and to offer financial incentives.

The survey was conducted between January and May of 2010 and included 3,143 randomly selected, nonfederal public and private firms with three or more employees.

Stephen Miller is an online editor/manager for SHRM.

Related Articles:

Consumer-Directed Plan Growth Continued in 2010, SHRM Online Benefits Discipline, September 2010

Reform Predicted to Drive Increase in Health Care Consumption, SHRM Online Benefits Discipline, September 2010

Large Employers Project 2011 Health Plan Costs to Rise 8.9%, SHRM Online Benefits Discipline, August 2010

Increased Health Care Cost Shifting Expected in 2011, SHRM Online Benefits Discipline, June 2010

Brokers Say Group Health Rates Rising for 2011, SHRM Online Benefits Discipline, June 2010

Quick Links:

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SHRM Online Health Care Reform web page 

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