Employer Provided Health Insurance Little Changed in ACA First Year

Kaiser 2014 Employer Health Benefits Survey

Econintersect: Health insurance premiums for employer sponsored plans have a modest 3% increase from 2013 to 2014, according to a survey conducted by the Kaiser Foundation. The survey was conducted from January to May 2014. Employee health plans are offered by 55% of firms and 62% of workers at those firms are covered. However, this may be changing in the future – see below. These percentages are unchanged from a year earlier. However, some companies have started to offer additional compensation to employees who do not enroll. This will support those who can obtain more suitable coverage through ACA (Affordable Health Care, aka Obamacare).

The percentage of covered workers enrolled in grandfathered health plans – those plans exempt from many provisions of the Affordable Care Act (ACA) – declined to 26% of covered workers from 36% in 2013. Other changes include reduction of the average length of the waiting period and an increase in the percentage with an out-of-pocket limit. The changes may be established for better alignment with Obamacare requirements.

Health insurance premiums for employer sponsored health insurance plans have increased by 69% over the past ten years, an average increase of 5.4% per year. The increase for this report (3%) is much below average. The increase last year was 4%.

One reviewer has pointed out the results regarding employer sponsored wellness plans. At least 98% of large company (200 or more employees) offer a wellness program, many are rather superficial and only cover such things as flu shots and references to online wellness resources. (Ron Z. Goetzal, Employee Benefit News – see Sources.)

The apparent lack of change in employer sponsored health plans in this survey may be an artifact of the newness of Obamacare. For 2015 enrollment through private health insurance exchanges (HIX), operating in parallel with the government run HIX, are projected to see increases by as much as 60%. However, the acceptance of private HIX by employers may be slow: A survey by the National Business Coalition on Health found that more than 2/3 of 330 employers in the survey (most with 1,000 to 5,000 employees) said they had no plans to consider private HIX in the next 3-5 years. But the situation may be different for smaller employers (fewer than 50 employees, fewer than 100 in some states) as the SHOP marketplace opens for business under ACA on November 15.

The full Kaiser report is available by clicking on the report cover image below: