Workers Bear Greater Burden Of Health Insurance Costs

Nov. 23--More high-deductible plans. Scaled back benefits. Surcharges on smokers and spouses of employees.

These are just a few tools employers are using to keep health benefit costs in check, according to a survey of employer-provided insurance plans released Thursday. The National Survey of Employer-Sponsored Health Plans shows the cost of health benefits increased 5 percent in Virginia this year, slightly higher than the national 3.8 percent increase, but still considered a moderate rate.

That cost includes both what the employer and employee chip in, with the national average being $11,635 an employee, and in Virginia, $11,290.

Mercer, a benefits consultant company, has been conducting the annual survey since 1986.

Local Mercer benefits consultant Richard Keatley said employers are trying to keep down the cost, in part because of a looming excise tax, called the "Cadillac tax." That's an Affordable Care Act element that will levy a 40 percent excise tax on issuers of high-cost benefit plans beginning in 2018. The idea of the tax is to slow growth of health costs and finance the expansion of health coverage. But critics are concerned it will hollow out coverage and put an ever-increasing burden on employees.

Keatley said most employers are crafting health plans with that in mind, though some are holding out hope for a federal repeal . Virginia companies that responded to the survey said if they made no changes to their current plans, the cost would rise by 8 percent next year, but they intend to reduce costs by making plan and vendor changes.

If employers didn't make any changes, an estimated 14 percent of Virginia employer respondents would hit the excise tax threshold in 2018.

One way to reduce costs is to create high-deductible plans. For instance, the percentage of people enrolled in high-deductible plans increased to 25 percent nationally, an all-time high. Virginia's rate was 23 percent, up from 21 percent last year. Those plans cost an average of 18 percent less than preferred provider, point-of-service or health maintenance organization plans. The percentage of companies offering high-deductible options went from 17 percent in 2012 to 29 percent this year.

Companies also are adding surcharges for employees' spouses and those who smoke. Spousal surcharges went from 9 to 12 percent of all large employers across the country, a rate that Virginia companies mirrored. The surcharge is generally for spouses who have access to other insurance through their own employer. The median spousal surcharge this year was $100 a month. Keatley said some surveys are showing that spouses are costing more than the employees to cover.

The percentage of large companies with tobacco surcharges is 29 percent this year, up from 26 percent last year.

The Mercer survey included 2,486 participants, including 109 Virginia companies, with 25 of those in Hampton Roads.

Companies are trying to include lower-cost treatment options for employees. For instance, coverage for telemedicine treatment jumped from 18 percent to 30 percent of all large employers.

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(c)2015 The Virginian-Pilot (Norfolk, Va.)

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