Employees are shelling out 28% more for workplace health benefits than just three years ago.
Most probably realize their monthly premiums are going up because they see more taken out of their paychecks. Workers are seeing their premiums rise year after year, going up by 19% on average since 2011, according to a report issued Thursday by Towers Watson/National Business Group on Health.
This is happening though the overall growth in health care spending has slowed in recent years.
Companies, meanwhile, are paying 14% more for their share of the premiums than they did in 2011, as they seek to shift more of the expense to their employees. Premiums cost an average of $9,560 per worker in 2014, up from $8,364 three years ago.
But where workers are really being socked is how much they have to pay out of pocket to go to the doctor or get a procedure. Deductibles, co-pays and co-insurance costs are all rising swiftly, soaring 40% on average since 2011. Overall, employees are shouldering 37% of the total cost of their benefits, up from 34% three years ago.
There are two main reasons for this, explains Randall Abbott, senior consultant at Towers Watson. One is because employers want their workers to be more aware of the true cost of health care. If employees have to pay more themselves, the thinking goes, they may be more conservative and cost-conscious in making doctor appointments and getting tests and procedures.
Employers are also concerned about the looming "Cadillac tax" that takes effect in 2018 as part of Obamacare. Companies with health plans that cost more than $10,200 per individual and $27,500 per family will have to pay a 40% tax on the amount in excess of these figures. That gives companies the incentive to keep premiums down by raising employees' out-of-pocket burden because premiums are counted in the tax calculation, but out-of-pocket costs are not.
"As their employers get closer to hitting the excise tax, employees will have to pay more at the point of service, may see [doctor] networks narrowed and see some benefits modified or eliminated," Abbott said.
While 95% of companies surveyed said subsidizing health care coverage is very important, almost as many said they plan to make moderate or significant changes to benefits by 2018.
Workers who put their spouses or children on their company health plan can expect to pay more too. A growing number of companies are levying surcharges or cutting back on their subsidies for spousal coverage, especially if the spouses have access to health insurance at their employer.
The survey looked at 595 large U.S. employers.
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