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Average Family Health Premiums Top $15,000 in 2011
At small firms, one in four face annual deductible of $2,000 or more

By Stephen Miller, CEBS  9/30/2011

After several years of relatively modest premium increases, annual premiums for employer-sponsored family health coverage in the U.S. increased to $15,073 in 2011, up 9 percent from 2010, according to the Kaiser Family Foundation (KFF)/Health Research & Educational Trust (HRET) 2011 Employer Health Benefits Survey.

On average, American workers paid $4,129 and employers paid $10,944 toward those annual family coverage premiums.

For worker-only health coverage, premiums increased 8 percent in 2011 to reach $5,429 annually, according to the survey. Workers on average paid $921 toward this coverage.

Premiums increased significantly faster than workers’ wages (2.1 percent) and general inflation (3.2 percent). Since 2001, family premiums have increased 113 percent, compared with 34 percent for workers’ wages and 27 percent for inflation.

"This year’s 9 percent increase in premiums is especially painful for workers and employers struggling through a weak recovery," Kaiser President and CEO Drew Altman said in a released statement.

Higher Deductibles

The study revealed that 31 percent of covered workers are in high-deductible health plans with deductibles for single coverage of at least $1,000, while 12 percent are in plans with deductibles of at least $2,000.

Covered workers in small firms (3-199 workers) are more likely to face high deductibles, with half of workers in small firms in plans with deductibles of at least $1,000, including 28 percent with deductibles of $2,000 or more.

These numbers in part reflect the rise of consumer-driven plans, which are high-deductible plans that include a tax-preferred savings option such as a health savings account (HSA) or health reimbursement arrangement (HRA). Over the prior two years, more firms started to offer these plans and the share of covered workers enrolled in this type of plan doubled from 8 percent in 2009 to 17 percent in 2011.

Plans that can be used with an HSA have lower premiums than other plan types but must have annual deductibles of at least $1,200 for an individual and $2,400 for a family in 2011. (To learn more, see the SHRM Online article "Consumer-Driven Decision: Weighing HSAs vs. HRAs.")

Other Findings

Additional highlights from the study include:

Offer rate. The share of firms offering health insurance to their workers was 60 percent in 2011, comparable to the levels in 2009 and earlier years.

Cost-sharing for office visits and drugs. Covered workers facing co-payments for in-network physician office visits on average paid $22 for primary care and $32 for specialty care. For covered workers with three- and four-tier drug plans, average co-payments were $10 for generic drugs, $29 for preferred brand-name drugs, $49 for nonpreferred brand-name drugs and $91 for specialty drugs.

Retiree health benefits. Among large firms (200 or more workers), about one in four (26 percent) offered retiree health benefits in 2011, unchanged from 2010 but down significantly from 32 percent in 2007.

Among survey findings related to the 2010 health care reform law:

Grandfathered status. Among covered workers, 56 percent remained in "grandfathered" plans as defined under the health care reform law. Grandfathered plans are exempted from some health reform requirements, including covering preventive benefits with no cost sharing and having an external appeals process. To obtain this status, employers cannot make significant changes to their plans that reduce benefits or increase employee cost.

Adult-children coverage. Employers added 2.3 million young adults to their parents’ family health insurance policies as a result of the health reform provision that allows young adults up to age 26 without employer coverage on their own to be covered as dependents on their parents’ plan. Young adults historically are more likely to be uninsured than any other age group.

Preventive services. One in four covered workers (23 percent) are in plans that changed their cost-sharing requirements for preventive services as a result of a requirement of the health care reform law that nongrandfathered plans provide certain preventive benefits without cost sharing. In addition, 31 percent of covered workers are in plans that changed the list of preventive services because of health care reform legislation.

The Kaiser Family Foundation is a not-for-profit provider of information on health issues. The Health Research & Educational Trust is a not-for-profit involved in research and education addressing health management and policy issues.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related Articles—SHRM:

Per Employee Health Coverage to Cross $10,000 Threshold, SHRM Online Benefits Discipline, October 2011

Slower Health Benefit Cost Growth Seen for 2012, SHRM Online Benefits Discipline, September 2011

Higher Health Spending Wiped Out Income Gains, SHRM Online Benefits Discipline, September 2011

Large U.S. Employers Revamping Health Benefits for 2012, SHRM Online Benefits Discipline, August 2011

Consumer-Driven Decision: Weighing HSAs vs. HRAs, SHRM Online Benefits Discipline, May 2011

Related Report—External:

2012 Segal Health Plan Cost Trend Survey, The Segal Company, September 2011

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform Resource Page

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