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Get ready for higher health insurance costs at work

October 22, 2013: 5:00 AM ET

Don't be surprised if you're shelling out more for health care on the job next year.

After several years of relatively moderate spending increases, health care costs are set to jump in 2014.

Employees will spend just under $5,000 on premiums and out-of-pocket expenses next year, according to new research by Aon Hewitt, an employee benefits administrator. That's up 9.5% from the year before.


This is because overall health care spending will increase next year at the fastest level since 2011, when several Obamacare provisions went into effect, including the requirement that employers cover children up to age 26 and insurers provide preventative care for free.

But now the main factor driving up spending is the improving economy. When conditions are better, people are more likely to go to the doctor, get tests done and undergo procedures, said Tim Nimmer, chief health care actuary at Aon Hewitt.

Though a major provision of Obamacare -- the individual exchanges -- launches in 2014, it won't have much of an impact on corporate plans. What is contributing some to the increase are new fees on employers and insurers to help cover insurers with new high-risk enrollees.


Still, employers are continuing to shift the cost of health insurance to employees, Nimmer said. They are raising premiums and deductibles, but are also implementing wellness programs at work to keep spending down.


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About This Author
Tami Luhby
Tami Luhby
Senior writer, CNNMoney

Tami Luhby is a senior writer at CNNMoney and covers income inequality, state fiscal problems, unemployment, housing policy and other economic issues. Luhby previously covered personal finance for Newsday and banking for Crain's New York Business.

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