Many employers see health insurance as an important part of their overall compensation. For the past 10 years, however, these benefits have been increasing in price. Prescription drug costs, increasing deductibles and rising health system pricing are just a few of the reasons. These trends are driving the increase in premiums and depressing wage growth. Many employers are frustrated at the increasing costs and administrative burdens. Some are looking for non-wage alternatives.
Wearable devices are being increasingly used by employers to support wellness programs. A survey showed that nearly half of all employers store data about employees' wearable devices. While price increases are still the primary driver of health insurance, more employers are exploring new payment options to keep employees healthy.
According to the Congressional Budget Office, the number of Americans who have health insurance through their employers will stay the same at 159 million over the next ten years. 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 include not only the cost for health insurance but also the cost of deductibles. A quarter of American workers have a minimum $2000 deductible. A quarter of American workers have a deductible of at least $2,000. This is why many companies choose to self-insure their employees. The self-insured policy saves money when there are fewer claims. However, if the claim exceeds expectations, the employer may have to pay more.
Small group rates are determined by the age mix of the employees. Massachusetts is an example of this. Workers under 25 are paid $1186 per year and those over 25 get $6,896.
Employers with larger budgets have greater control over the coverage of their employees' plans. Most large employers offer a biometric screening to their employees. They also provide a wellness program for employees and encourage them to go to lower-cost providers. Similarly, employers in the public sector can customize health care plans to meet their needs.
The Affordable Care act will allow employers with 51 to 100 employees to enter a merged insurance market for 2016. These employers will pay premiums that can go up to 9 %. The law also requires that each state sets a rate every year. 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 has a 50-percent minimum contribution from employers.
Despite these requirements being met, the number employers offering health insurance continues its decline. After a decade-long period of rapid increases in benefits costs, many small businesses are becoming frustrated at the uncontrollable high cost. While most employers do not see an increase in their health insurance rates, some find it difficult to retain staff.
As unemployment remains low, so is the difficulty in keeping employees. Employers face this problem. Employers that don't offer their employees health insurance will face a $2320 per-employee penalty. You can also face thousands in fines if you fail to comply COBRA. This law requires employers offer ongoing health care to their employees.