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Employer-sponsored insurance grows more expensive for workers

Health Care and Health Insurance
by Cabe Chadick
States take their own paths for dealing with health insurance changes
States take their own paths for dealing with health insurance changes

Over the past few years, the cost of insurance has continued to rise, albeit at a slower pace than had been experienced across much of the previous decade. However, the impact these increases have on consumers' pockets has grown more varied, because they're being saddled with both higher premiums and deductibles on their employer-sponsored coverage.

The average annual premium for employer-sponsored health insurance for a family came to a little more than $18,100 this year, an increase of 3 percent from 2015, according to the latest Employer Health Benefits Survey from the Kaiser Family Foundation. The average amount of that total paid by those workers came to nearly $5,300. It's worth noting, however, that the average premium paid by workers at smaller companies (those with fewer than 200 people on the payroll) was about $850 less than what workers at companies with at least 200 employees paid.

Health insurance cost increases are increasingly being shifted to employees.Health insurance cost increases are increasingly being shifted to employees.

Other costs to consider
Meanwhile, though, the share of coverage paid by workers has risen sharply in the past decade, rising to its current level from less than $3,000 in 2006, the report said. And that growth outstrips the rate of acceleration in total premiums. In all, premiums have increased 58 percent in the past decade, but worker contributions have grown 78 percent in the same period.

Further, those who have to pay a deductible on their coverage have seen that amount grow as well this year, the report said. For 2016, the average deductible was nearly $1,500, up from a little more than $1,300 in 2015. That's an increase of more than 12.1 percent.

And in all, nearly 2 out of every 3 employees at a small company were in plans with deductibles of at least $1,000, in comparison with 45 percent of those who work at larger employers. When raising the deductible minimum to $2,000, more than 2 in 5 small-business workers fell into this category, compared to only about 1 in 6 at firms with at least 200 employees. Perhaps not surprisingly, all these numbers significantly outpace the rates seen a decade ago.

Can anything be done?
This is a trend that is putting a pinch on both employers and their workers, and one that's particularly a problem for smaller companies because their costs can vary sharply from one year to the next, according to Lehigh Valley Business. This is often because smaller companies don't have as much data on what their employees' health care needs are or will be, and as such there can be sharp spikes that don't exist for larger companies.

"Health care is an unpredictable expense," Shawn Hughes, vice president of a corporate benefits consultancy in Pennsylvania, told the publication. "I think we all realize health insurance is not going down."

With this in mind, health insurance companies may need to work more closely with companies regardless of size to help them get a better handle on what they can expect in terms of changes to premiums. That, in turn, could help to inform future decisions about the possible ways they can meet their employees' needs without breaking the bank.

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