A 2012 survey by the Kaiser Family Foundation about health insurance benefits revealed interesting trends. Where does your company fit into these national averages? We hear so often about the financial burden of small employers to offer health insurance benefits. The fact that 50% of businesses the size of many New York restaurants, bars, wineries, microbreweries and microdistilleries (3-9 employees) still try to offer health insurance benefits to their employees is encouraging. It shows they are trying to be both competitive and to attract and maintain career professional minded staff. This differs from the family run businesses of the past. It also means that the costs for labor are much more significant than they were in yesteryear.
The survey report revealed the following:
- · Average cost of health insurance: $5,615 for single, $15,745 for family
- · Average employee contribution: 18% single, 28% family
- § 61% contribute 25% or less of the premium
- § 14% contribute 50% or more of the premium
- § 94% contribute to family plan premium
- § Small companies with less than 200 employees require lower contributions for singles but higher contributions for families when compared to employers of 200 or more
- § Average increase from prior year premium: 3-4%
- § Average increase in premium cost since 2002: 97% (in other words, it doubled over the past decade)
- § Highest premiums by geographic region: northeast (includes New York)
Most employers are still paying the bulk of the premium each month but plans are moving toward those with more cost-sharing by the employee.
With respect to deductibles, co-pays and other cost-sharing is required of almost all employees, with 34% of employer provided coverage requiring a deductible over $1,000.
With respect to prescription coverage, 99% of employer provided coverage offers prescriptions with almost all requiring a deductible or co-pay.
For employers with 3-9 employees, 50% offer health insurance nation-wide. Most employers have minimum work hour rules or waiting periods for new employees.
Notably, eligible employees who take employer offered health insurance is only 81%, presumably accounting for another primary coverage in two parent working families.
What remains to be seen is how federal and state health care reform will impact these trends. Will more or less small employers be able to afford to offer healthcare coverage? Will many opt to pay the penalty for non-coverage because it is more economical than offering coverage? What do you predict?