Employers consider health insurance an essential part of their compensation. These benefits have been steadily rising in cost for the past ten years. Prescription drug costs, increasing deductibles and rising health system pricing are just a few of the reasons. These trends are driving both the rise in premiums as well as depressing wages. Employers are often frustrated by rising costs and increased administrative burdens. Some employers are searching for non-wage alternative jobs.
Employers increasingly use wearable devices to improve their wellness programs. One survey found that one-fifth of employers collect data from employees' devices. Although the main driver of the market for health insurance is price increases, employers are now looking at other payment options to keep their employees healthy.
The Congressional Budget Office predicts that in the next ten-years, the number Americans who receive health coverage through employer-sponsored programs will remain at the current 159 million. The tax-favored alternative to health insurance is still available. Nonetheless, the cost of single coverage will be more than 9.86 percent of household income in 2019.
Premiums are not just the cost of the health insurance, but also the cost of deductibles. An estimated 25% of workers in the United States have a minimum $2,000. Many companies opt for self-insured plans to lower the cost of their benefits. Self-insured plans can be a cost-saving option if there are few claims. Employers are responsible for paying extra if the claim is larger than they expected.
The employees' age mix determines small group rates. Massachusetts workers below 25 years old are paid an average $1186 annually, while those above 25 receive $6,896.
Larger employers can have greater control over their plan coverage. Most large employers offer a biometric screening to their employees. Employers also have the option of a wellness program that encourages employees to seek out lower-cost providers. Employers in the public sector have the option to customize their health care plans to suit their individual needs.
Employers with 51 to 100 employees will be moved by the Affordable Care Act into a merged marketplace for 2016 health insurance. These employers can expect premiums to rise by as much as 9 percent. It also requires states to set rate annually. A $3,480 penalty is imposed on those who do not offer affordable plans.
Small employers are required to contribute additional funds to subsidize workers' health insurance in order to comply the ACA. For example, in Massachusetts, employers are expected to contribute $50 per employee per year.
Despite these requirements however, there is still a decrease in the number of employers that offer health insurance. Many small employers are dissatisfied with the uncontrollable costs of benefits, after a decade filled with rapid increases. Despite the fact that health insurance rates have not increased for most employers, some employers are still struggling to retain their employees.
The difficulty of keeping employees on board is growing as the unemployment rate continues to be low. This is a problem for employers. Employers can be fined $2,320 per person if they fail to offer health insurance. In addition to the fines, COBRA is a law that requires employers and employees to provide continuous health care.