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04/10/2023
Posted by: Altura Benefits in Insurance
In 2022, employers were balancing cost containment and employee engagement. The 2022 KFF Employer Benefits Survey provides insights into how employee health plans fared amid concerns about both high inflation and high turnover. Here are the highlights.
Health plan premiums did not see significant hikes in 2022. KFF explains this could be due to low levels of utilization in the fall of 2021, which would have been when employers were setting their premiums. Steeper premium increases may be in store for 2023 because of inflation.
In 2022, 13% of firms required no employee contribution for single coverage, and 5% required no contribution for family coverage, but the majority of employers do require employees to help pay for their coverage. Workers at small companies tend to pay a much larger portion of the premium for family coverage, but the cost splitting for single coverage tends to be similar. The average employee contribution was 17% of the premium for single coverage and 28% for family coverage, which KFF says is similar to the percentages seen in 2021.
Although premiums did not rise significantly in 2022, they have become much more expensive over the last five years. Since 2017, premiums have increased by 20%. During this time, the worker contribution has only increased by 7%.
In addition to annual premiums, deductibles and coinsurance or copays are also common requirements in employer health plans.
Among workers with single coverage, 88% have an annual deductible, and the average deductible is $1,763. Although this is similar to the average deductible in 2021, the deductible has increased by 61% over the last 10 years. However, most covered workers are in plans in which the annual deductible does not have to be met before certain services and prescriptions are covered.
The average copayment was $27 for primary care and $44 for specialty care, and the average coinsurance rates were 19% for primary care and 20% for specialty care. Copayments were more common for primary and specialty care than coinsurance.
Many covered workers had separate costs for hospital admissions and surgery. In 2022, 68% of covered workers had coinsurance for hospital admission, and 69% had coinsurance for outpatient surgery, and the average coinsurance percentage was 20% for both. Some covered workers also copayments or a separate annual deductible for hospital admissions and outpatient surgery.
Nearly all plans capped annual out-of-pocket expenses, but the amount of the cap varied significantly. Although 8% of workers had an out-of-pocket limit of less than $2,000, 26% had a limit of $6,000 or more.
The number of employers offering health benefits decreased. In 2022, 51% of firms offered some year benefits. This is down from 2021, when 59% of firms offered health benefits. However, among firms with at least 50 workers, 93% offer health benefits. Smaller firms are less likely to offer coverage, and this drives down the average offer rates. In 2022:
At firms that offered coverage, 78% of workers were eligible to enroll, and among workers who were eligible, 77% chose to enroll. Put together, this means that 60% of workers with employers that offered health benefits had coverage. Part-time workers were less likely to have employer-sponsored coverage, since only 26% of large firms and 17% of small firms offered coverage to them.
Among firms not offering health benefits, various reasons were cited:
Overall, 75% of firms that offered health benefits only offered one health plan. However, large firms were more likely to offer more than one plan type.
Among firms offering one type of health plan, PPOs were the most common plan type, followed by high deductible health plans with a savings option (HDHP/SO).
For covered workers enrolled in an HDHP with a health savings account, the average annual employer HSA contribution was $648 for single coverage and $1,117 for family coverage. However, 39% of employers offering single coverage and 32% of employers offering family coverage did not make any contribution to workers’ HSAs.
Self-funding was a common option, especially among large employers. In 2022, 65% of covered workers were in a self-funded plan. This is similar to what was seen in 2021, when 64% of covered employees were in a self-funded plan.
In 2022, 38% of small firms that offered health benefits used a level-funded plan, which combines a small self-funded component with stop-loss insurance.
The vast majority of employers that provided health benefits also provided prescription drug benefits. KFF says prescription drug benefit designs have become increasingly complex with the implementation of formularies and multiple cost-sharing tiers.
In 2022, 40% of small firms and 55% of large firms offered health risk assessments, while 24% of small firms and 45% of large firms offered biometric screening. KFF says the number of large firms offering biometric screening has increased since 2021, when only 38% offered this, and it appears that companies are reinstating programs that were paused during the pandemic. Among large firms offering health benefits, 85% offered a specific wellness program; this is the same percentage seen in 2017.
Telemedicine has proven to be a popular option, and 96% of large firms have telemedicine options in their largest health plan, up from three years ago, when only 82% did. Among firms with 50 to 199 workers, 87% provide health plans with telemedicine, compared to 65% that did so three years ago.
Telemedicine services can be offered through a specialized provider like Teledoc, MDLIVE or Doctor on Demand or through the health plan. Among firms that have 50 or more employees and offer telemedicine services:
KFF says that 65% of employers at small firms and 79% of employers at large firms are satisfied or very satisfied with the cost of care for their employees.
In other metrics, large and small firms noted more similar levels of satisfaction. Around 87% of employers are satisfied or very satisfied with the quality of care, and around 88% are satisfied or very satisfied with timely access to services. Additionally, around 76% of employers are satisfied with the level of employee engagement with benefits.
The 2022 KFF Employer Benefits Survey shows what other employers are doing, and this can serve as an important benchmark. Employees tend to place a high value on health benefits, so offering a competitive plan is a critical component of any employer’s talent strategy, regardless of the size of the company.
Whether you have one employee or 1,000, Altura can help you access a health insurance plan at the best rates. Learn more.