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Industry News

September 30, 2019

Kaiser Foundation: Cost of Employer-Provided Health Coverage Passes $20K a Year

“If our costs go up, theirs is going to go up in that same proportion.”

The rate of growth in coverage costs, including those borne by employees, continued to outstrip rises in inflation and wages, according to the Kaiser foundation, squeezing workers despite a low unemployment rate that might encourage companies to sweeten their benefits.

 

4C Health Solutions can help employers take control of their healthcare costs,  beginning by looking at:

  • All claims data
  • Every expended dollar (employer and employee)
  • By each member; and,
  • Per every provider

Only 4C can provide the insight necessary to truly manage cost and quality, fully-independent of their current benefits provider.

Wall Street Journal–September 25, 2019

The average total cost of employer-provided health coverage passed $20,000 for a family plan this year, according to a new survey, a landmark that will likely resonate politically as health care has become an early focus of the presidential campaign.

Annual premiums rose 5% to hit $20,576 for an employer-provided family plan in 2019, according to the yearly poll of employers by the nonprofit Kaiser Family Foundation. On average, employers bore 71% of that cost, while employees paid the rest

“It’s a milestone,” said Drew Altman, chief executive of the foundation. “It’s the cost of buying an economy car, just buying it every year.”

Employees’ costs rose at an even faster clip—the average annual amount workers paid toward premiums for the family plans grew 8%, to $6,015 this year. The average deductible for single coverage, which employees pay out of their pockets before insurance kicks in, went up as well, to $1,655, though that didn’t factor in plans with no deductible at all.

For an individual employer plan, the average total premium cost was $7,188 in the 2019 survey, or 4% higher than last year.

At Elkay Manufacturing Co., a closely held company in Oak Brook, Ill., with around 1,500 U.S. employees, the cost of coverage has been going up around 5% to 6% a year, said Carol Partington, senior manager of total benefits. For 2019, the company introduced its first high-deductible plan, and put in place a new $250 penalty for employees who get imaging scans without checking prices through a price-transparency program.

Elkay, which makes products including sinks and faucets, and does interior design work, tries to keep workers’ share of health costs at roughly 20%, with the company bearing the rest, Ms. Partington said

“If our costs go up, theirs is going to go up in that same proportion.”

The rate of growth in coverage costs, including those borne by employees, continued to outstrip rises in inflation and wages, according to the Kaiser foundation, squeezing workers despite a low unemployment rate that might encourage companies to sweeten their benefits.

“For some workers, employer-based coverage isn’t such a great deal,” because of the high costs they have to bear, said Gary Claxton, a senior vice president of the Kaiser foundation.

 

The survey also showed that firms with a large share of lower-wage workers tended to require them to pay a larger amount toward their premiums on average, and many of their employees remained uncovered.

“Health-care affordability is generally the No. 1 issue for voters,” said Dan Mendelson, a founder of a health-care consulting firm and former federal official who is now an operating partner at a private-equity firm. “The issue is the costs that consumers actually see, including deductibles, copays and the cost of prescription drugs.”