Health insurance to cost employers more

Preliminary findings indicate an increase of 4.3 percent is ahead for companies next year

The average cost to employers to insure their workers next year is expected to rise 4.3 percent, a relatively small increase but one that is being watched warily, according to preliminary findings in the annual Mercer survey of employer-sponsored health plans.

While 2018 is projected to bring only a slight uptick from the 4.1 percent increase this year, it still represents the highest benefit cost increases since 2011, when costs rose 6.1 percent, the benefits survey released this week found.

Next year’s increase would again be close to 6 percent except that roughly half of employers surveyed said they will take corrective steps to adjust plan offerings through different carriers or by pushing high-deductible plans to workers, Mercer

spokesman Bruce Lee said.

Such juggling helps companies keep costs down, but Lee acknowledged they can feel disruptive both to human resources directors and to employees.

One of the biggest price challenges for companies next year is expected to come from covering pharmaceuticals, which will rise more than 7 percent, the survey found.

The vast majority of U.S. workers — about 150 million people — get their health coverage through jobs. For years the cost to those with such plans has remained relatively flat, health plan experts said.

The more noticeable change for many workers in recent years has been the steady shifting of the cost of their care onto them. One of the most popular strategies in such cost sharing is through high-deductible plans, once almost unheard of in employer-sponsored coverage.

Such cost-sharing has been steadily gaining popularity among employers as a way to hold down benefits costs.

On average the average total cost of family premiums was $18,764 in 2017, a separate study by Kaiser Family Foundation, also released this week, showed.

That is a modest increase of just 3 percent from the previous year, but workers also are picking up a greater share of the cost, typically about a third of the cost or $5,714.

The Kaiser report found that workers’ average contribution to family premiums has climbed 32 percent in the past five years, significantly faster than the 14 percent growth of their employer’s share.

It also showed that this year more than half of covered workers had a general annual deductible of at least $1,000 for single coverage. That compares with just more than a third in 2012.

Still, the cost to both employers and employees is rising much slower than individual market plans being offered by the Affordable Care Act for next year. In Houston, some insurers have asked the federal government to approve rate hikes of nearly 24 percent.

Insurers have said the political uncertainty that has roiled their industry as Congress and the White House seek to dismantle the current law and replace it with something as yet unknown is partly to blame for driving up prices.

While employer-based plans have traditionally been seen as immune to the volatility of the much smaller individual market, the current turmoil is bleeding into the group market.