Sept 6 – Study Shows Healthcare Costs Increasing

Sept6-Healthcare Bigger Bite of Paychecks

Health care costs keep rising, taking a larger share of paychecks and company budgets. That’s the finding of a recent SHRM article, Healthcare Taking a Bigger Bite Out of Paychecks,  that focuses on the findings of their 2016 survey of 2,124 SHRM members.

According to the study, the average cost of providing health care makes up 7.6 percent of a company’s annual operating budget and equates to an average of $8,669 per covered employee – an increase of nearly $500 over three years.

“More and more employers are having to push the increasing cost of health care onto employees,” said Evren Esen, director of workforce analytics at SHRM. “High-deductible health plans such as health savings accounts [HSAs] and health reimbursement arrangements [HRAs]are one way that employers are attempting to counter the high costs.”

Currently, 48 percent of organizations offer HSAs, and 23 percent offer HRAs.  And, on average, employers contribute the following to these Consumer-Directed Health Plans:

  • $576 to their employees’ HSAs.
  • $1,885 to employee HRAs.

Here are a few other benchmarks:

Health Care Coverage

  • 98 percent of organizations offer health care coverage for full-time employees.
  • 92 percent offer coverage for the spouse of employees, down from 96 percent in 2011.
  • 23 percent offer health care coverage for part-time employees, down from 27 percent in 2014.

Deductibles, Premiums and Co-pays

Across all plans, the average annual in-network deductible for employee-only coverage is $1,554, the total monthly premium for employee-only coverage is $461 and the total monthly premium for family coverage is $1,292.

Higher Costs for Lower Coverage

The median in-network deductible on an employer-sponsored preferred-provider organization (PPO) health plan increased 50 percent, from $1,000 to $1,500 in 2016, according to preliminary results from the 2016 Health Plan Survey from United Benefit Advisors (UBA), a nationwide network of employee benefits brokerage and advisory firms.

The findings, based on responses from 11,524 employers surveyed earlier this year about their 2016 health plans, show that:

  • By raising the deductible $500, employers could avoid a premium increase of roughly 3 percent to 6 percent, UBA found.

Families Bearing the Brunt of the Cost 

The survey also showed that families are bearing the brunt of the cost of health insurance. For an employee electing single coverage, the employer covers 71 percent of the monthly premium, but only 54 percent of a family premium.

“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,” said Les McPhearson, CEO of UBA, in an online post. “Employers simply cannot continue to absorb unsustainable increases in health care costs. Unfortunately, neither can employees.”

The SHRM article contains more detailed information and findings, and is worth a read if you are considering your own company’s healthcare coverage.

 

CONTACT eESI FOR ASSISTANCE at 888-465-1171

If you would like assistance understanding your healthcare options, or if you simply want to evaluate potential company plans, give us a call at eESI.  We can help your small business acquire Fortune 500 healthcare and benefits, like vision, dental, long and short-term disability, life insurance and more, at discounted prices.

 

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Payroll Admin

Still doing your own payroll? Tasks involved with Payroll and Employee Administration are purely transactional events.

Human Resources

At ESI, our business is all about assisting with the management of any organization’s most valuable resource: people.

Employee Benefits

A benefit package can be a major incentive to lure the best new talent to your workforce and keep your current employees happy.

Risk Management

Risk is a basic part of business. As a co-employer we work to eliminate, mitigate or share your associated legal liabilities.

HCM Technology

ESI continuously utilizes the latest in technological advances through online and mobile solutions to make your life easier.