Employee healthcare premiums outpace employer contributions
- Continuing on a six-year run, annual employer-sponsored health insurance premiums for family coverage rose by an average of 3% this year to $18,764. The 2017 Employer Health Benefits Survey, a benchmark Kaiser Family Foundation/Health Research & Educational Trust (HRET) study, shows that while premium increases slowed, employees' contributions have been growing faster than employers' since 2010 (32% vs. 14%). HRET polled 2,100 large and small employers.
- The survey results also showed that employees in small firms paid higher premiums than employees in big firms. Workers at large companies now pay an average of $5,714 annually for health premiums, while workers in firms with fewer than 200 employees pay an average of $6,814 a year.
- Fewer small firms provide health coverage than in the past, according to the survey. Half (50%) of firms with fewer than 50 employees provide coverage, down from 59% in 2012. Of the small firms that don't offer health coverage, 44% cited the reason as the high cost, and 17% cited their small size as the cause.
Although health premium increases have slowed in the past seven years, based on HRET survey results, holding down healthcare costs remains a high priority for employers as plan providers. Cost concerns are the main reason small firms have dropped coverage. But large firms could see substantial increases in their premiums, as well. Employers in a National Business Group on Health survey predicted a 5% cost increase in medical and pharmacy benefits in 2018 — a major driver of healthcare cost and a number to be watched.
A recent Aon study concurs that 2018 could be a year of substantial healthcare cost increases. After negotiations with vendors and plan redesigns, Aon predicts that healthcare costs will rise by 7.2% in 2018, up from 6.9% in 2017.
Recognizing that traditional healthcare cost-saving methods alone weren't enough, NBGH president Brian Marcotte said some employers are beginning to focus on treatment outcomes and the delivery of healthcare services, along with advancing technology that is making both more efficient. Employers — even small ones — will want to consider innovative technologies designed to make treatment more efficient and cost-effective.
- Kaiser Family Foundation/HRET Premiums for Employer-Sponsored Family Health Coverage Rise Slowly for Sixth Straight Year, Up 3% but Averaging $18,764 in 2017
- Kaiser Family Foundation/HRET 2017 Employer Health Benefits Survey