By Karen Axelton
When I opened my company’s health insurance premium renewal packet recently, I got a pleasant surprise: Although our small business’s premiums increased, it was at a far lower rate than in years past. Turns out we’re not alone: The Kaiser Family Foundation reports that the cost of employer-provided health insurance increased by about 4 percent compared to last year. By comparison, family coverage costs rose by 9 percent between 2010 and 2011.
The average cost to cover a family of four through employer-provided insurance is now about $16,000, according to the 2012 Employer Health Benefits Survey. The cost of individual insurance coverage through an employer increased by a mere 3 percent, to an average cost of $5,615 per policy.
Despite widespread concerns about the Patient Protection and Affordable Care Act’s effect on employer-provided insurance, the survey found that 61 percent of companies offer health benefits to their workers – the same as last year.
Ironically, workers who earned lower wages had higher deductibles and paid more for their insurance than higher-paid employees. Kaiser found that in where at least 35 percent of workers earn $24,000 or less annually, workers paid an average of $1,000 more in premiums (nearly $5,000 out of the employees’ pockets). By comparison, workplaces where at least 35 percent of workers earn $55,000 annually, workers paid an average of $4,000 for their share of premium costs.
The slower rise in costs is good news for your small business’s budget, but will it last? Experts caution it’s not necessarily a result of the PPACA, but could stem from several factors:
- The general slowdown in the economy has curtailed spending all over.
- Many employees are limiting or avoiding doctor visits or non-urgent surgeries because they can’t afford the out-of-pocket costs.
- Employers are better educating employees about the costs of coverage, whether by shifting more of the premium costs to them, increasing copay and prescription drug costs, or providing more information about options for choosing insurance and providers. Given this information, more consumers have been willing to do things like choosing generic over brand-name drugs.
How are you keeping health insurance costs down at your small business?
Image by Flickr user andres rueda (Creative Commons)