Obamacare premiums are set to rise 25% on average in 2017, and many consumers purchasing coverage through the exchanges will be down to just one insurer, the White House confirmed this week. With open enrollment set to begin next month, what should the more than 150 million Americans covered by employer-sponsored insurance expect?
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First, here’s the good news: Annual premiums for employer-sponsored family health coverage is up a modest 3% from last year to $18,142, with workers on average paying $5,277 toward the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Education Trust 2016 Employer Health Benefits Survey.
“The employer market is remaining much more stable than the individual market,” said St. Louis insurance broker and past president of the Missouri Association of Health Underwriters Emily Bremer. She noted that “the modest 3% rise doesn’t tell the whole story for smaller corporations who are still feeling an impact from rising premium costs.”
According to Bremer, small corporations feeling the effect of the premium increases are beginning to offer their employees additional “choices” when it comes to their insurance plans, such as higher-deductible plans. According to Kaiser, deductibles rose 12% in 2016 – and the upward trend is expected to continue. For the average American family, this can mean unexpected out-of-pocket costs – or, even worse, ignoring health warnings.
Making health care even dicier, Bremer foresees that companies will reduce insurance eligibility of spouses in 2017 to offset premium rate increases.
“Employers are looking at reducing contributions or access to employer plans for spouses due to the employer mandate,” Bremer said. “Employers are trying to avoid or reduce penalty exposure to focus on keeping coverage affordable for the employee as well.”
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Employees of Fortune 500-type corporations can also expect to see more choices when it comes to their insurance plans in 2017, according to Beth Grellner, Health and Benefits Leader of international insurance brokerage firm Willis Towers Watson.
“Large corporations are also struggling with insurance cost increases and are starting to focus on managing high-cost claimants more efficiently,” Grellner said. “Giving employees more options, or the opportunity to choose a plan that best fits their needs, can create cost savings for both the corporation and employee in the long run.”
Eric Wilson, principal of Chicago-based Wilson Associates health insurance company, confirmed many employees will notice a change in coverage of their families for 2017.
“Employers are starting to cover their individual employees, but not their families,” says Wilson. In such situations, advises Wilson, “exhaust every option available to you, as different plans make more sense for different family members depending on their health situations.”