As American workers approach this year's open-enrollment season for employer-sponsored health care plans, they can expect the same bad news they've been hearing for years: Workers are once again getting hit with more of the costs of their coverage in the form of higher premiums and higher deductibles.
Annual family premiums rose 5 percent to an average of $19,616, the eighth year of increases, according to the 2018 Kaiser Family Foundation Health Benefits Survey released earlier this month. On average, workers contribute $5,547 of the cost of family coverage. Premiums for singles increased 3 percent to an average of $6,896, with workers contributing an average of $1,186.
Health care premiums continue to take up more of employees' paychecks, according to Kaiser data. Since 2008, average family premiums have jumped 55 percent, twice as fast as workers' earnings and three times as fast as inflation.
Meanwhile deductibles -- the amount patients pay for health care before insurance kicks in -- continue to increase. Just over a quarter of all covered employees are enrolled in policies with a deductible of at least $2,000, up from 22 percent last year and 15 percent five years ago, according to the Kaiser survey. Among covered workers at firms with fewer than 200 workers, that number jumps to 42 percent.
The average single deductible is $1,573, slightly higher than last year. The percentage of workers enrolled in high-deductible plans was unchanged this year from a peak of 29 percent, according to Kaiser data.
In the Kaiser survey and elsewhere, signs show that employers' love affair with high-deductible health care plans is starting to wane. More companies are reinstating traditional plans in addition to high-deductible policies, offering workers more choices.
For instance, data from the National Business Group on Health shows a dramatic decrease in the number of large employers that are offering only a high-deductible plan -- from 39 percent in 2018 to an expected 30 percent in 2019.
Preliminary results from the annual Mercer employee benefits survey, due out later this month, confirms the trend, said Tracy Watts, senior partner at Mercer. "Employers are accepting that consumers want more choice and need more choice to meet their health care needs," she added.
What does this mean for you as you face that mountain of open-enrollment documents? Watts recommends these three steps to help reduce your out-of-pocket health care costs.
Carefully check each of your choices
With so many companies offering additional plan choices this year, it's more important than ever to do the math, Watts advised. Calculate the annual amount that will be withheld from your paycheck for each option and your deductible, then subtract any contribution your employer will make to a Health Savings Account (HSA).
Be sure to also compare co-pays, co-insurance, emergency room co-pays (often much higher than doctor visits) and out-of-pocket maximums for each of the plans. Do the same for any insurance options your spouse or partner may have. If your company offers a "decisions support tool" to help with this process, be sure to use it.
Make the most of an HSA
Even if your employer is offering more choices this year, you may find the high-deductible plan is still the most affordable. If so, an HSA can help a bit with your out-of-pocket expenses. According to the Kaiser survey, almost a third of companies that offer a high-deductible health plan also offer an HSA option, and many of those firms will contribute funds to your account.
In 2019 you can make HSA contributions up to $3,500 for an individual and $7,000 for a family if you're in a qualifying plan with a deductible of at least $1,350 for an individual or $2,700 for a family. You contribute pretax dollars, earnings grow tax-free and withdrawals for qualified medical expenses are also tax-free. There's no time limit to use the funds, and HSAs travel with you if you change or leave your job, making them a good vehicle for retirement health savings if you don't need the funds beforehand.
Look for less-expensive care options from your company
To cut down on overall health care costs and offer employees more affordable choices for their out-of-pocket expenditures, many companies offer an array of supplemental benefits designed to offer more convenient, low-cost care. When evaluating plan choices, find out if the coverage includes the following:
- Urgent care or retail clinic visits. These are often an efficient, affordable way to treat minor health events such as a sprain, skin rash or flu shot, and many employers offer coverage for these visits, often with no or low co-pays to encourage employees to avoid more costly trips to the ER.
- Telemedicine. The number of employers offering telemedicine services has grown dramatically -- 74 percent of large employers compared to 27 percent in 2015, according to the Kaiser survey. These services offer treatment via video chat or remote monitoring in place of in-person physician visits for a cost of between $10 and $40 per visit, Watts said.
- Chronic care management plans. If you have a chronic condition such as diabetes or heart disease, check to see if your employer offers a management program at no or low cost. Trained professionals can work with you, usually by phone, to help manage your condition.
- Supplemental policies. To help take the sting out of high deductibles, some employers are offering low-cost supplemental coverage for hospital stays or accidents. "These plans pay a cash benefit if you are hospitalized or have an accident that you can use for your deductible and out-of-pocket expenses," Watts explained. Look for a list of what qualifies for the benefit and what the payout would be. And be sure to watch for preexisting conditions that these plans may not cover.
- Rx drug coverage. Most employers offer some type of prescription drug coverage, but depending on your medical needs and the drugs you're prescribed, your share of the costs can be extremely high. Be sure to check which drugs are covered, what co-pays are charged for both brand-name and generic drugs, and any coverage maximums.