Employers Taking More Efforts to Cut Health Benefit Costs

Employers are turning to consumer-directed health care and are tightening spousal rules as health benefit cost containment strategies, according to Conrad Siegel Actuaries’ annual Medical and Prescription Drug survey.

The survey revealed that employer premium sharing remains steady (as a percentage of overall premiums), as employers change the benefit plan design instead of shifting more premium costs to employees. In 2015, only 11% of surveyed companies did not require employees to pay any amount of plan premiums.

The average percentage of the medical premium that employees paid for single coverage in 2015 was 15%, which has remained relatively constant over the past several years. The average premium share for family coverage was 20% in 2015.

Thirty-three percent of employers have some form of spousal coverage provision for medical and prescription drug insurance. Of those that have a provision, 52% of employers do not allow spousal coverage if a spouse has health insurance access through their own employer. This percentage increased from 31% in 2014 and 25% in 2013.

Of employers that do offer spousal coverage, 27% required a surcharge to cover the spouse, compared to 16% in 2014. The average surcharge in 2015 was $2,288, which increased from $1,730 in 2014.

More employers are turning to consumer-directed health care plans (CDHPs), high-deductible health plans that include health savings accounts (HSAs), health reimbursement accounts (HRAs), medical expense reimbursement plans (MERPs) or flexible spending accounts (FSAs).

The survey found, overall, 50% of employers offer a plan with either an HSA or an HRA account option. This is up significantly from last year at 41%. In 2015, 24% of employers offered an HSA to their employees. This increased from  2014, when 20% of employers offered an HSA.

Of employers that offer an HSA, 79% fund at least part of the account. The average employer funding for individuals in an HSA account is approximately $769, and the average funding for families is $1,337. This is down from $847 and $1,560 in 2014, respectively.

In 2015, 26% of employers offered an HRA or an MERP to employees. This increased from 2014, when 21% of employers offered an HRA. The average employer funding for individuals in an HRA account is approximately $1,743, and the average funding for families is $3,204. This is down from $1,916 and $3,194 in 2014, respectively.

In 2015, 47% of employers offered an FSA to employees, the exact same figure as the prior year.

Over 110 companies of all sizes responded to the survey, with 65% coming from organizations with more than 100 employees. Companies that responded to the survey were from both not-for-profit and for-profit organizations.