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. There are many reasons for this, including rising deductibles, higher prescription drug costs, and increased health system pricing. These trends are driving the increase in premiums and depressing wage growth. Many employers are unhappy with rising costs and increasing administrative burdens. Some employers are searching for non-wage alternative jobs.
Employers are increasingly using wellness programs through wearable technology. According to a survey, one fifth of employers now collect data on 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. Health insurance will still be tax-favored. In 2019, however, the cost for single coverage will exceed 9.86 percent of household income.
Premiums cover not only the price of health insurance, but also the cost to pay 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. The employer must pay more if the claim is greater than expected.
Small group rates are determined by the age mix of the employees. Massachusetts has a median annual income of $1186 for workers younger than 25 and an average annual income of $6,896 for those older.
Larger employers have greater control of plan coverage. Many large employers offer biometric screenings for their employees. They also offer a wellness program and encourage employees to visit lower-cost providers. Similarly, employers in the public sector can customize health care plans to meet their 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. States are required to establish a rate each year. A $3,480 penalty is imposed on those who do not offer affordable plans.
Some small employers may need to make additional contributions in order to subsidize their employees' health insurance. For example, in Massachusetts, employers are expected to contribute $50 per employee per year.
Despite these requirements, the number of employers offering health insurance continues to decrease. After a decade-long period of rapid increases in benefits costs, many small businesses are becoming frustrated at the uncontrollable high cost. These rates of health insurance aren't increasing for most employers but some are still struggling with employees to keep them.
As the unemployment rate remains low, the difficulty of retaining employees is only increasing. Employers face this issue. If they don't offer health insurance to their employees, they will face a penalty of $2,320 per employee. In addition to the fines, COBRA is a law that requires employers and employees to provide continuous health care.