Higher Deductibles Keep Premium Increases in Check

The following information from the Healthcare Trends Institute gives us some insight into current trends regarding deductibles and insurance premiums. HRC Total Solutions has been administering Health Reimbursement Arrangements, Health Savings Accounts and Flexible Spending Accounts to help offset these costs for over 12 years! Please reach out to our sales team for more information about how we can keep your costs down and your participants happy with their health plan.

Recent survey findings reveal that although growth of employer-sponsored health premiums is modest, deductibles are on the rise.

Conducted from January through May 2014, the 2014 Employer Health Benefits Survey from the Kaiser Family Foundation and the Health Research & Educational Trust (HRET) takes a detailed look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, and employer opinions.
Modest Premium Increases

In 2014, annual premiums for a family reached $16,834, up 3 percent from the previous year.  On average, workers pay $4,823 toward family health coverage costs this year. Over the past five years, premium rates have increased a slower rate than the years prior (26 percent vs. 34 percent). This year’s increase is also is comparable the year-to-year rise in worker’s wages (2.3 percent) and general inflation (2 percent).

In comparison, annual premiums for worker-only coverage stand at $6,025 this year with workers contributing $1,081 on average annually.
Higher Deductible Increases

Unlike the modest increases in premiums, the survey found that since 2009, the average deductible is up by 47 percent ($1,217 vs. $826). The study also found that 41 percent of all covered workers face an annual deductible of at least $1,000 with workers at small companies (three to 199 employees) more likely to face large deductibles with 61% facing at least $1,000 deductibles.

“The deductibles for workers have crept higher over time, topping $1,200 on average this year,” said study lead author Gary Claxton, a Foundation vice president and director of the Health Care Marketplace Project.  “Today, four in 10 covered workers face at least a $1,000 deductible, nearly double the share from just five years ago.”
Good or Bad News?

What does this ultimately mean for employers and employees? Well, there’s no simple answer and depends on whether or not someone gets sick.   

“The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm,” Foundation President and CEO Drew Altman, Ph.D., said.

Read the complete 16th annual Kaiser/HRET survey of more than 2,000 small and large employers here.


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