Large Firms See Smaller Health Coverage Price Hikes

November 20, 2006 ( - Employers renewing their workplace policies continue to face rising costs, but larger companies are dealing with lower rate hikes than their smaller counterparts, according to a new survey.

A news release from The Council of Insurance Agents & Brokers (CIAB) about its fall Employee Benefits Market Survey said 50% of small accounts (50 or fewer employees), 42% of medium accounts (51 to 500 employees) and 19% of large accounts (501 or more employees) were faced with rate increases of 11% to 15%. However, 41% of large accounts, 34% of medium accounts, and 16% of small accounts saw rate hikes of 6% to 10%.

Among those experiencing minor increases, an additional 16% of large accounts had increases of 1% to 5%, compared to 2% of small accounts and 5% of medium accounts in this increase range.

According to the news release, the survey found that, while a small percentage of employers are dropping their workplace policies altogether, the majority of employers continue to control costs by increasing the employee share of premiums, assessing prescription drug co-pays, and charging higher deductible/co-pays.

The survey also found that employers are exploring options for health savings accounts (HSAs), with 70% of responding brokers reporting they had sold an HSA plan for either 2006 or 2007 plan years. As found in the spring 2006 survey, size of the employer did not appear to be a significant factor in choosing an HSA option. Brokers reported similar numbers of small, medium and large accounts implementing these plans.

Of the employers who selected a high-deductible health plan (HDHP)-HSA account, survey respondents reported that 68% used it as an additional plan option, 10% to replace an existing plan, and 22% as both.

The CIAB represents US and international commercial insurance agents and brokers who annually place more than 80% of the commercial property/casualty premiums and administer billions of dollars in employee benefits business, according to the group.

The survey results are here .