A June survey of benefits brokers conducted by the Council of Insurance Agents & Brokers found that employers of all sizes are experiencing a sharp rise in health plan renewal rates. “Several members commented that they are seeing large increases,” said Ken A. Crerar, President of The Council of Insurance Agents & Brokers. Crerar went on to say that, “brokers have some uncertainty about business going forward, but most believe there will be new demand for their services.”
As a result, employers are looking for ways to cut costs including raising deductibles, introducing Health Reimbursement Accounts (HRA) or passing the increase on to employees through a raise in the employee premium portion. Most small employers with 50 or fewer employees are seeing rates increases ranging from 11-20 percent. More than half of mid-sized employers (those with 50 – 500 employees) and large employers (500 or more employees) are experiencing increases ranging from 6-15 percent.
In the Pacific Northwest, 40 percent of medium accounts are experiencing increases of 11-15 percent. And 2011 isn’t looking much better. In their annual report, Behind the Numbers: Medical Cost Trends 2011, PricewaterhouseCoopers LLP anticipates an average nationwide increase of at least nine percent. The report surveyed more than 700 employers from 30 industries.
The same report also predicts a health insurance deductible of at least $400 for the majority of the American workforce. This is a sign that employers are attempting to share costs by raising out-of-pocket limits, replacing co-pays with co-insurance and by resorting to a high-deductible health plan. Rather than paying $20 for an office visit, more plans will insist participants pay for a 20 percent share of the bill.
Additional trends include the elimination of health-benefits for retirees and an increasing focus on wellness programs, a major initiative included in the new healthcare reform overhaul.
