Many employers see health insurance as an important part of their overall compensation. However, the cost of these benefits is on the rise for over a decade. There are many reasons for this, including rising deductibles, higher prescription drug costs, and increased health system pricing. These trends are driving both the rise in premiums as well as depressing wages. Employers are becoming frustrated with the rising costs and administrative burdens. Others are seeking non-wage options.
Employers are increasingly using wearable devices for wellness programs. One survey revealed that 55% of employers have access to data from employees' wearable devices. While the health insurance market is still largely driven by price increases, more employers are also looking at new payment methods to help keep their employees healthy.
The Congressional Budget Office predicts that in the next ten-years, the number Americans who receive health coverage through employer-sponsored programs will remain at the current 159 million. The tax-favored alternative to health insurance is still available. However, single coverage will cost more than 9.86% of household income in 2019.
Premiums can be defined as the total cost of insurance. An estimated 25% of workers in the United States have a minimum $2,000. The deductible for workers in the United States is approximately $2,000. Many businesses are now opting to be self-insured, which can reduce the overall cost of benefits. Self-insured plans can be a cost-saving option if there are few claims. Employers are responsible for paying extra if the claim is larger than they expected.
The employees' age mix determines small group rates. Massachusetts workers below 25 years old are paid an average $1186 annually, while those above 25 receive $6,896.
Employers with larger budgets have greater control over the coverage of their employees' plans. Large employers often offer biometric screenings to employees. They offer a health and wellness program to encourage employees to see lower-cost doctors. The public sector can also tailor their health care plans to fit employees' needs.
Employers with 51 to 100 employees will be moved by the Affordable Care Act into a merged marketplace for 2016 health insurance. These employers can expect premiums to rise by as much as 9 percent. State governments are also required to set a rate annually. Those who don't offer affordable plans are subject to a $3,480 annual penalty.
Small employers are required to contribute additional funds to subsidize workers' health insurance in order to comply the ACA. Massachusetts employers are required by law to contribute $50 annually per employee.
Despite these requirements however, there is still a decrease in the number of employers that offer health insurance. After a decade of rapid increases, many small employers are frustrated with the uncontrollable cost of benefits. Despite the fact that health insurance rates have not increased for most employers, some employers are still struggling to retain their employees.
The unemployment rate is low and this means that it is becoming more difficult to retain employees. This is a major problem for employers. Employers will be penalized $2,320 per employee if they do not offer health insurance. For failing to comply COBRA, which requires employers to offer continuing health care to employees, there are thousands of dollars worth of fines.