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Affordability an Issue for Employer-Sponsored Health Insurance

Published Tuesday Nov 6, 2018

Affordability an Issue for Employer-Sponsored Health Insurance

The cost of health insurance ticked upward in 2018, with smaller employers feeling the most pressure, according to The Mercer National Survey of Employer-Sponsored Health Plans 2018. The survey reports that average total health benefit cost per employee rose by 3.6 percent. That follows an increase of 2.6 percent in 2017. While overall cost growth remains moderate, averaging 3.3 percent annually over the past five years compared to 5.7 percent over the prior 10-year period, it continues to outpace inflation.

  • Among all New England employers, total health benefit cost for active employees increased 3.5 percent in 2018, to an average of $15,174 per employee. 
  • The average employee share of total premium cost in NH (across all plans and coverage tiers) is 18 percent which is among the lowest in the country. The average employee share throughout New England is much higher at 24 percent.
  • Asked about their 2019 costs, NH respondents estimated that if they made no changes to their current plan, cost would rise by 3.7 percent. However, they expect to hold their cost increase to 2.4 percent by making changes to their plans and/or changing vendors.
  • 73 percent of NH respondents offered a high-deductible consumer-directed health plan (CDHP) with an account feature (an HSA or HRA) in 2018. 
  • In NH, 29 percent of all employees covered in respondents’ health plans are enrolled in PPO plans, 26 percent in HMOs, and 45 percent in CDHPs. The median PPO deductible in NH is $650, less than half the national median deductible of $1,500.
  • The average employee contribution amount for employee-only coverage in NH is $163 monthly for a PPO plan, $310 monthly for an HMO and $78 monthly for an HSA-eligible CDHP. For all New England respondents, the average is $173 monthly for a PPO plan, $188 monthly for an HMO and $99 monthly for an HSA-eligible CDHP.

Nationally, the employer experience was mixed. Among smaller employers (those with 10-499 employees), cost rose by 5.4 percent on average, while midsize and large employers with 500 or more employees held cost growth to 3.2 percent. Prescription drugs remained the top cost driver. Among employers with 500 or more employees, overall drug benefit cost rose by about 7 percent, as cost for specialty drugs rose by about 12 percent. 

In 2018, employees paid, on average, 25 percent of the total cost of coverage through paycheck deductions. That works out to nearly $3,200 per employee on average – and doesn’t include their out-of-pocket spending for healthcare services.  Among smaller employers, the average PPO in-network deductible rose sharply in 2018, topping $2,000 for an individual. Most large employers did not raise PPO deductibles, the plan type with the highest enrollment.



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