Employees of midsize and large companies in 2015 paid an average of $4,700 for their health insurance, up from $2,001 in 2005, according to recent analysis from Aon Hewitt.
Because they are looking for solutions to high costs, companies are changing the design of their benefit programs, Aon Hewitt Senior Vice President Mike Morrow said, moving toward leaner plans. In fact, 38% of employers have increased their participants’ deductibles and/or copays in the last year, and another 46% may do so in the future, the report from Aon said.
Companies are also beginning to offer high-deductible health plans (HDHPs) more frequently, an option that didn’t really exist for employers until the last decade, said Gerald Kominski, the director of the UCLA Center for Health Policy Research; they are now the second-most popular plan choice, surpassing health-maintenance organization plans (HMOs).
Employers are making cutbacks in health coverage in other ways, too. Some 18% of companies are reducing subsidies for covered dependents, and 17% are adding a surcharge for adult dependents who have access to other health coverage. Plus, 43% of companies are considering using unitized pricing, in which employees pay per person instead of individual versus family.
“It comes down to a fairness-and-equity point of view,” Morrow said. “If you are covering many more members of your family than another employee, is it fair that your contributions are the same?”
These types of increases in health-care costs do make a significant impact on workers’ purchasing power, since they happen faster than increases in wages, Kominski said.
Still, health-care rate increases are showing some signs of slowing down. In 2015, the average health-care rate increase for employees was 3.2%, the lowest increase since Aon started tracking this data in 1996. Although this increase was comparatively low, it was still higher than the consumer-price index and overall inflation, which remained basically unchanged in the 12 months ending with September 2015, and the overall compensation budgets of Aon’s clients, Morrow said.