Health insurance is a vital aspect of compensation for many employers. The cost of these benefits has risen steadily over the past decade. There are many reasons for this, including rising deductibles, higher prescription drug costs, and increased health system pricing. These trends are leading to rising premiums and lowering wages. Many employers are frustrated at the increasing costs and administrative burdens. Some employers look for non-wage work alternatives.
Wearable devices are being increasingly used by employers to support wellness programs. One survey found that one in five employers collect data on employees' wearable devices. Although the main driver of the market for health insurance is price increases, employers are now looking at other payment options to keep their employees healthy.
According to the Congressional Budget Office the number of Americans who will continue to receive health care through their employer-sponsored plans will be the same 159 millions in ten years. That means health insurance will continue to be a tax-preferred alternative. Nonetheless, the cost of single coverage will be more than 9.86 percent of household income in 2019.
Premiums include not only the cost for health insurance but also the cost of deductibles. The deductible for workers in the United States is at least $2,000. A quarter of American workers have a deductible of at least $2,000. This is why many companies choose to self-insure their employees. 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.
Small group rates are determined by the age mix of the employees. Massachusetts has a median annual income of $1186 for workers younger than 25 and an average annual income of $6,896 for those older.
Employers with larger budgets have greater control over the coverage of their employees' plans. Many large employers offer biometric screenings for their employees. Employers also have the option of a wellness program that encourages employees to seek out lower-cost providers. The public sector can also tailor their health care plans to fit employees' needs.
The Affordable Care Law will make it possible for employers with 51 to 100 workers to be part of a merged healthcare insurance market. This is expected to happen in 2016. Premiums will increase for these employers by up to 9 percent. It also requires the states to set an annual rate. A $3,480 penalty is imposed on those who do not offer affordable plans.
In order to comply with the ACA, some small employers must make additional contributions to subsidize health insurance for their workers. Massachusetts's example is Massachusetts. Employers are expected to contribute $50/year per employee.
Despite these requirements, the number of employers offering health insurance continues to decrease. After a decade with rapid increases, many small businesses are now frustrated by the uncontrollable price of benefits. Even though the cost of health insurance is not rising for most employers many are still having difficulty keeping employees.
The difficulty in retaining employees is increasing as the unemployment rate stays low. Employers face this problem. Employers that don't offer their employees health insurance will face a $2320 per-employee penalty. In addition to the fines, COBRA is a law that requires employers and employees to provide continuous health care.