Number of employers delaying renewal dates to December 1 increased 3.1 percent from 2014 to 2015
Employers in states that allowed “grandmothering” – the extension of non-ACA-compliant plans – are now seeing proposed health plan rate increases of 11 percent, on average, according to the 2015 United Benefit Advisors Health Plan Survey. Many employers, particularly small to mid-size, are still delaying the effects of the Affordable Care Act (ACA). Seventy-three percent of plans in the survey have a renewal date on or after December 1, 65.4% of which were small businesses in the fewer than 100 employee market. Employers in the under 50 employee market saw a 2.1 percent increase in renewals after December 1, 2015, compared to 2014. On average, employers this year saw only a modest 2.4 percent increase in annual health plan cost per employee.
“These delay tactics continue a trend of employers avoiding becoming ACA-compliant, but relief runs out starting next year and permanently ends in late 2017,” says Carol Taylor, Chairwoman of the UBA Client Compliance Solutions Committee and a Benefits Advisor with D & S Agency, a Virginia-based insurance firm and UBA Partner. “Small employers, in particular, need to stay aware of the costs under a compliant plan heading into 2018 and the potential for exceeding the thresholds for the Cadillac Tax.”
Average Health Plan Costs, Premiums, and Contributions
The average annual health plan cost per employee for all plans in 2015 is $9,736, a 2.4 percent increase from the previous year; employees picked up $3,333 of that cost, while employers covering the balance of $6,403.
The average premium for all employer-sponsored plans was $509 for single coverage and $1,211 for family coverage.
20.6 percent of all plans required no employee contribution for single coverage (a 5.1 percent decrease since 2014), and 7.3 percent required no contribution for family coverage (a 3.9 percent decrease since 2014).
For plans requiring contributions, employees contributed an average of $140 for single coverage and $540 for family coverage, which is only a slight increase from 2014 results - 3.7 percent and 5.5 percent respectively.
Among all employers surveyed, more than half (53.7 percent) offer only one health plan choice to employees, with 28.7 percent offering two choices. As far as plan choices, preferred provider organizations (PPOs) continue to dominate the market (46.8 percent of plans offered and 54.8 percent of employees enrolled), and health maintenance organization (HMO) plans continue to decrease, as they’ve done since 2012 when they accounted for 19.1 percent of the market but now account for only 17.3 percent. Consumer-directed health plans (CDHPs) continue to show the greatest increase in growth, up 10 percent from 2012 through 2015.
Most employers (72.5 percent) define full time work as 30 hours per week, and 7.6 percent define it as 40 hours per week. Only 9.9 percent of employers require fewer than 30 hours per week.
“With the continued effects of grandmothered plans suppressing the inevitable step-increase in health care costs, the survey results clearly show that we haven’t seen the full impact of the Affordable Care Act on employers’ and employees’ wallets,” says Les McPhearson, CEO of UBA. “But even with the current protections, the increases we are seeing aren’t trivial, making the savings UBA Partners offer—in some cases up to 7 percent—mission critical. As relief runs out, the continued growth of CDHPs and the associated increase in employee cost responsibility will make consumer-focused transparency and wellness tools more necessary than ever before.”
Order a copy of the 2015 UBA Health Plan Survey Executive Summary or request a customized benchmarking reporting by contacting media representative Carina Sammartino, csammartino [at] fishervista.com.
About the UBA Health Plan Survey
United Benefit Advisors (UBA), one of the nation’s largest employee benefits advisory organizations, released the results of its 2015 UBA Health Plan Survey. The report database contains the validated responses of 18,186 health plans, sponsored by 10,804 employers, who cumulatively employ more than two million employees and more than five million total lives. Individually validated responses from employers in more than 3,000 communities were utilized in compiling the database.
While other surveys primarily target large employers, the focus of the UBA survey is to report results that are applicable to the small and mid-size companies that represent the overwhelming majority of the nation’s employers, while also including a mix of large companies in rough proportion to their actual prevalence nationally.
The survey includes plan renewals from June 2014 to May 2015 through the joint effort of 129 of the nation’s premier independent benefit advisory firms, which comprise UBA. The national distribution of UBA Partner Firms, the diversity of their client base, and the extraordinary number of survey responses provided a unique basis to conduct a non-probability sample survey that yields benchmark results that pertain to a representative cross-section of the nation’s employers.
Contact a UBA Partner Firm for a customized benchmark survey based on industry, region and business size.
About United Benefit Advisors
United Benefit Advisors is the nation's leading independent employee benefits advisory organization with more than 200 offices throughout the United States, Canada and the United Kingdom. As trusted and knowledgeable advisors, UBA Partners collaborate with more than 2,200 fellow professionals to deliver expertise, thought leadership and best-in-class solutions that positively impact employers and make a real difference in the lives of their employees and families. Employers, advisors and industry-related organizations interested in obtaining powerful results from the shared wisdom of our Partners should visit UBA online at www.UBAbenefits.com.
Carina Sammartino, FisherVista