The median in-network deductible on an employer-sponsored PPO health plan increased 50 percent, from $1,000 to $1,500 in 2016, yet employer costs remain steady, according to the newly released 2016 Health Plan Survey from United Benefit Advisors (UBA), the nation’s largest independent survey of employer-sponsored benefits.
Despite these significant deductible increases, nearly half of all employees continue to enroll in PPO plans, finds UBA.
The survey shows that average health plan costs for employers actually decreased slightly, from $9,736 in 2015 to $9,727 in 2016, while the employees’ share increased as they continue to accept lower coverage levels. Of the $9,727, employees contributed an average of $3,378 and employers contributed on average $6,350, whereas in 2015, employers paid $6,403 of the $9,736 average overall cost, while employees paid $3,333.
“Overall, employer costs remained consistent because they are passing more and more of their increases on to employees – a trend we expect to see more of in the future,” says Cynthia Walter, president of BAGNALL. a UBA partner firm. “Employers simply cannot continue to absorb unsustainable increases in health care costs. Unfortunately, neither can employees.”
Monthly Premiums and Copays
UBA finds that total monthly premiums, combined for all types of plans, remained flat at $509 for a single. However, employers shifted costs to employees in other ways, including median out-of-network deductibles, which jumped from $3,000 to $3,400 this year (a 13.3 percent increase) and median ER copays increased from $250 to $300 (20.0 percent).
The employees’ share of monthly premiums increased only slightly from $140 in 2015 to $144 (2.6 percent), and family portions went from $540 in 2015 to $552 in 2016 (2.2 percent).
UBA also finds that families are again bearing the brunt of the cost of health insurance. For an employee electing single coverage, the employer covers 71 percent of the monthly premium, and only 54 percent of a family premium.
“The deductible increases are mostly due to two factors: First, by raising the deductible $500, you avoid a premium increase of roughly 3 percent to 6 percent. The second factor is the result of insurance carriers being forced to comply with ‘metal’ levels (platinum, gold, silver, bronze) in the Affordable Care Act (ACA) small group market,” says Carol Taylor, Director of Compliance & Health Plan Collaborative with D&S Agency, a UBA Partner Firm based in Roanoke, Virginia. “As long as insurance carriers are required to meet the ACA metal levels, we can expect to see plan changes in this same direction.”
UBA’s 2016 Health Plan Survey Executive Summary will be available to the public in late September.