After several years of relatively modest premium increases, annual premiums for employer-sponsored family health coverage increased to $15,073 this year, up 9% from last year. On average, workers pay $4,129 and employers pay $10,944 toward those annual premiums.
Premiums increased significantly faster than workers' wages (2.1%) and general inflation (3.2%). Since 2001, family premiums have increased 113%, compared with 34% for workers' wages and 27% for inflation, according to the Kaiser Family Foundation/Health Research & Educational Trust 2011 Employer Health Benefits Survey released Thursday.
"This year's 9% increase in premiums is especially painful for workers and employers struggling through a weak recovery," says Kaiser President and CEO Drew Altman.
According to Maulik Joshi, president of HRET and senior vice president for research at the American Hospital Association, "survey findings related to the impact of early provisions in health reform provide valuable insight for employers, providers, consumers, and policymakers as they prepare for additional provisions to take effect by 2014."
The survey of small and large employers provides a detailed picture of trends in private health insurance costs and coverage. This year's survey also looked at employers' experiences with several already implemented provisions of the 2010 health reform law affecting employer coverage.
In particular, the survey estimates that 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.
"The law is helping millions of young adults to obtain health coverage. In the past, many of these young adults would have lost coverage when they left home or graduated college," says study lead author Gary Claxton, a Kaiser vice president.
The study also finds 31% of covered workers are in high-deductible health plans, facing deductibles for single coverage of at least $1,000, including 12% facing deductibles of at least $2,000. Covered workers in smaller firms (3-199 workers) are more likely to face such high deductibles, with half of workers in smaller firms facing deductibles of at least $1,000, including 28% facing 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 options such as a Health Savings Account or Health Reimbursement Arrangement. Over the past two years, more firms have started to offer these plans, and the share of covered workers enrolled in this type of plan has doubled, from 8% in 2009 to 17% in 2011. Plans that can be used with a Health Savings Account 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 this year.
Other findings from the study include:
Worker-only coverage. Premiums for worker-only health coverage increased 8% in 2011 to reach $5,429 annually. Workers on average pay $921 toward this coverage.
Offer rate. The share of firms offering health insurance to their workers is 60% this year, comparable to the levels in 2009 and earlier years. Last year's survey found an unexplained sharp increase in the share of the smallest firms (three to nine workers) offering coverage, boosting the overall offer rate; this year's results suggest that the one-year bump did not reflect a change in the long-term trend.
Cost-sharing for office visits and drugs. Covered workers facing co-payments for in-network physician office visits on average pay $22 for primary care and $32 for specialty care. For covered workers with three- and four-tier drug plans, average copayments are $10 for generic drugs, $29 for preferred brand-name drugs, $49 for non-preferred brand-name drugs, and $91 for specialty drugs.
Retiree health benefits. Among large firms (200 or more workers), about one in four (26%) offer retiree health benefits in 2011, unchanged from last year and down significantly from 32% in 2007.
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