Annual premiums for employer-sponsored family health coverage in 2011 increased to $15,073, a 9 percent hike from 2010, according to the Kaiser Family Foundation/Health Research & Educational Trust 2011 Employer Health Benefits Survey.
Employees now pay an average of $4,129 while employers pay an average of $10,944 for those annual premiums. Premiums increases are growing quicker than workers’ wages at 2.1 percent and inflation at 3.2 percent. In fact, family premiums have jumped 113 percent since 2001, compared to 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,” says Kaiser President and CEO Drew Altman, Ph.D.
The survey also estimates that employers added 2.3 million young adults to their parents’ family health insurance policies, which is because of the health reform provision that allows young adults up to age 26 to be covered as dependents. Typically, young adults are more likely to lack insurance than any other age segment.
“The law is helping millions of young adults to obtain health coverage,” says study lead author Gary Claxton, a Kaiser vice president and co-executive director of the Kaiser Initiative on Health Reform and Private Insurance. “In the past, many of these young adults would have lost coverage when they left home or graduated college.”
High-deductible health plans are especially gaining popularity among employers, the survey reveals, as covered workers enrolled in this type of plan have increased from 8 percent in 2009 to 17 percent in 2011. Of those participating in HDHP, 31 percent of covered workers have at least $1,000 deductibles for single coverage. Another 12 percent have deductibles of at least $2,000.
High deductibles are more common in smaller firms, where half of workers have at least a $1,000 deductible, and 28 percent have at least $2,000 deductible or more. HDHP premiums, however, are lower than other plan types when paired with a health savings account, though the annual deductibles must be at minimum $1,200 for an individual and $2,400 for a family this year.
Grandfathered plans are also a significant coverage option, the survey finds, with 56 percent of covered workers falling into these plans, which are exempted from certain health reform requirements. Some of the exemptions include covering preventive benefits with no cost sharing and providing an external appeals process. To qualify, no significant plan changes can be made that reduce benefits or increase employee cost.
Twenty-three percent of covered workers are enrolled in plans that adjusted cost-sharing requirements for preventive services because of the health reform law that states non-grandfathered plans must provide certain preventive benefits without cost sharing. Another 31 percent of covered workers participate in plans that modified their preventive services because of health reform.