Many employers see health insurance as an important part of their overall compensation. But the cost of these benefits has increased steadily for a decade. There are many reasons for this, including rising deductibles, higher prescription drug costs, and increased health system pricing. These trends are driving the rise of premiums and depressing wages. Many employers are frustrated with increasing costs and administrative burdens. Some employers are searching for non-wage alternative jobs.
Employers increasingly use wearable devices to improve their wellness programs. According to a survey, one fifth of employers now collect data on wearable devices. While health insurance continues to be driven largely by rising prices, employers are increasingly looking at alternative payment methods to help their employees.
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. This means that health insurance will remain a tax-favored option. However, the cost of single coverage in 2019 will be higher than 9.86% of household's income.
Premiums cover not only the price of health insurance, but also the cost to pay deductibles. About 25% of Americans have a deductible less than $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 save money when claims are low. If the claim is more than anticipated, the employer will have to pay an additional amount.
The age mix of employees determines the rates for small groups. Massachusetts has a median annual income of $1186 for workers younger than 25 and an average annual income of $6,896 for those older.
Larger employers have greater control of plan coverage. 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.
Employers with 51-100 employees will be able to join a merged market for health insurance in 2016 under the Affordable Care Act. These employers will see a rise in premiums of up to 9 percent. It also requires states to set rate annually. For those who fail to offer affordable plans, a $3480 annual penalty will be imposed.
In order to comply with the ACA, some small employers must make additional contributions to subsidize health insurance for their workers. Massachusetts has a 50-percent minimum contribution from employers.
Despite these requirements and the decline in employers offering insurance, it is not surprising that there are fewer of them. Many small employers are unhappy with the high cost of benefits after a decade of rapid growth. Although these health insurance rates are not increasing for most employers, some are still finding it difficult to retain employees.
As unemployment remains low, so is the difficulty in keeping employees. This is a major problem for employers. Employers will be penalized $2,320 per employee if they do not offer health insurance. In addition to the fines, COBRA is a law that requires employers and employees to provide continuous health care.