The average health care premium rate increase for large employers in 2012 was 4.9%, down from 8.5% in 2011 and 6.2% in 2010. In 2013, however, average health care premium increases are projected to jump up to 6.3%.
Aon Hewitt’s analysis showed the average health care cost per employee was $10,522 in 2012, up from $10,034 in 2011. The portion of the total health care premium that employees were asked to contribute toward this premium cost was $2,204 in 2012, compared to $2,090 in 2011. Meanwhile, average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, were $2,200 in 2012, compared to $2,072 in 2011.
For 2013, average health care costs per employee are projected to jump to $11,188. Consistent with the previous two years, employees will be asked to contribute 21% of the total health care premium, which equates to $2,385 for 2013. Average employee out-of-pocket costs are expected to increase to $2,429. These projections mean that over the last five years, employees’ share of health care costs—including employee contributions and out-of-pocket costs—will have increased more than 50% from $3,199 in 2008 to $4,814 in 2013.
On average, Aon Hewitt forecasts that companies will see 2013 cost increases of 7% for health maintenance organization plans (HMOs), 6.1% for preferred provider organizations (PPOs) and 6.1% for point-of-service (POS). That means from 2012 to 2013, the average cost per person for major companies is estimated to increase from $10,659 to $11,405 for HMOs, $10,433 to $11,069 for PPOs and $11,062 to $11,737 for POS plans. “In 2010, employers found themselves in a challenging budgetary position, thus taking more aggressive actions with their benefit plans. An expected decline in employment levels and new costs resulting from health care reform had to be factored into expected costs, which led many employers and insurers to conservatively project their health care premiums for 2011,” explained Tim Nimmer, fellow to the Society of Actuaries, member of the American Academy of Actuaries and chief health care actuary at Aon Hewitt. “As actual results materialized, employers have seen some stabilization in employment levels, less severe impact of high cost claims, a general movement towards consumer-driven plans and greater clarity around the average cost impact associated with health care reform. As a result, 2012 premiums were offset to reflect the better than expected historical experience. For 2013, we expect premium increases to gravitate back to the six percent range.”