What's going to happen to employer health insurance prices
and coverage during open enrollment this year? Do you have any
advice on picking the best plan?
Health Care Reform Could Cost You
The National Business Group on Health conducts an annual survey
of health benefits offered by many of the largest employers
nationwide, and it always provides a first glimpse at health-plan
changes for the coming year. The big headline is that employers
expect benefit costs to rise by an average of 7% in 2013 -- on top
of increases of about 7% in both 2011 and 2012. Sixty percent of
employers say they plan to pass along a portion of the increase in
the form of higher premiums in 2013; in general, premiums will
increase less than 5%. Large employers still subsidize a big
portion of premiums, typically covering about 80%, leaving
employees to pay the remaining 20%. The premium split for dependent
coverage is usually 70% for employers and 30% for employees.
Smaller companies generally pay a smaller proportion of costs.
Employers are making other adjustments to costs and incentives
that may make a big difference in your expenses. Here are some
changes to look out for and strategies for making the most of
Extra out-of-pocket expenses.
Many employers are shifting additional costs to employees: 40% plan
to increase in-network deductibles, 33% plan to increase
out-of-network deductibles, and 32% plan to boost their
out-of-pocket maximums. Also, 13% of employers plan to increase the
co-payment for buying drugs at a retail pharmacy (with a smaller
increase for mail-order prescriptions), and about 8% plan to
increase the coinsurance rate for primary and specialist care
(coinsurance is the percentage of the bill you pay yourself).
Compare overall costs -- premiums, coinsurance rates and
deductibles -- when picking a policy. And be careful to choose
providers and pharmacies that participate in your plan; otherwise,
your deductibles as well as your co-payments could be higher.
More high-deductible health plans and health savings
In 2013, more than half of employers plan to offer a
consumer-directed health plan (usually a high-deductible health
plan paired with a health savings account), which is similar to the
numbers offering such plans over the past five years. But a big
change is in the number of employers that plan to offer a
high-deductible plan as their only option -- 19% in 2013, up from
7% in 2009. Employers are also making larger contributions to HSAs
to encourage people to pick these plans: 43% of employers
contribute a fixed amount to the HSA for each participant (average:
$500), 40% make contributions based on completing a wellness
program (average: $400), 21% put seed money into new accounts, 12%
make matching contributions, and 10% make contributions based on
progress toward a health goal. Only 14% make no employer
contributions. Don't leave free money on the table. Find out what
you'd need to do to qualify for employer contributions, and factor
in your employer's contribution to an HSA when picking a plan. See
What to Know About Health Savings Accounts
for more information.
Better tools to compare health care costs.
It has always been difficult to compare prices for medical
procedures, especially because each insurer has different deals
with providers. But as insurers boost deductibles and coinsurance
to help reduce their expenses, you have more of an incentive to
become a savvy health care consumer. And more health plans and
employers are providing tools to help you research how much each
provider under their plan will charge you for a procedure.
Sixty-five percent of health plans now provide online
price-transparency tools, and 14% offer the information through a
third-party provider. Only 21% provide no tools to help you compare
costs. Make the most of these resources when choosing a provider,
hospital or facility for medical tests and urgent care. See
30 Ways to Cut Health Care Costs
for more information about making the most of these resources.
Stronger incentives to participate in wellness
Nearly half of employers are using incentives to encourage
participation in wellness programs, and 29% reward specific health
outcomes (such as achieving certain goals for body mass or
cholesterol levels). The incentives for participating in wellness
programs have increased over the past few years, with maximum
payouts averaging $450 for employees and $375 for dependents in
2013, up from $250 for employees and $203 for dependents in 2011.
It may not have been worth the hassle to participate in a wellness
program in the past, but the bigger rewards may now make them worth
a second look. On the flip side, you could lose by choosing not to
participate. About one-fourth of employers plan to apply surcharges
to employees for not participating in certain programs.
Reduced flexible-spending limits.
Ninety-four percent of the companies said they will have to lower
their medical flexible spending account ceilings to comply with the
$2,500 maximum for 2013 written into the health care reform law
(many employers currently let employees contribute $3,000 to $4,000
to these tax-advantaged accounts). For more information, see
New Limits on Flex Accounts Coming