PPACA Affecting Employees, Taxpayers and Plan Design

In 2013, employers covered 18% more of a single employee’s health insurance premium, but asked employees with dependents to pick up 3% more of the family premium. Though families were hit hardest, the average worker also saw an overall increase in health care costs due to rising out-of-pocket costs, including higher in-network deductibles, in-network co-insurance and out-of-pocket maximums. The survey also shows the average in-network co-insurance dropped from 90% to 80%, a decrease in coverage.

Workers are also bearing more of the burden of public employees’ health care through higher taxes, the survey indicates. The survey finds government/education employees’ portion of employer-sponsored health plans decreased nearly 30% since 2012 for a single employee; therefore, taxpayers assumed an addition 24.28% of public employee health costs.

Employers are passing along more health costs to employees, but are not ready to eliminate coverage and send employees to exchanges. Only 3% of employers in the survey offered payment in exchange for opting out of coverage in 2012 as did 3.5% in 2013.

To avoid certain aspects of PPACA, the survey shows an increasing trend toward self-funding. Self-insurance has grown as a funding option for insurance plans by 10% from 2012 to 2013. Interest has increased since it may offer some compliance and cost relief associated with reform since these plans do not have to adhere to community rating rules and state-mandated benefits, UBA said.

The UBA survey findings also show some areas of noncompliance with the PPACA. More than 17% of employers still have a waiting period of more than 90 days, a violation of eligibility requirements under the law. In addition, plans in the Northeast continue to cost the most since they typically have low/no deductibles, more state-mandated benefits and higher in-network co-insurance. These plans, in particular, will need to be mindful of the Cadillac tax, UBA said.

The survey, which includes data from nearly 11,000 employers, allows employers to benchmark their plans. A copy of the 2013 UBA Health Plan Survey Executive Summary can be downloaded from http://bit.ly/19S32xm.