Many employers view health insurance as a critical component of their compensation. But the cost of these benefits has increased steadily for a decade. These factors include rising deductibles and prescription drug costs, as well as the increasing cost of health system pricing. These trends are driving premiums to rise and depressing wages. Many employers are frustrated with increasing costs and administrative burdens. Some employers are searching for non-wage alternative jobs.
Employers are using more wearable devices for their wellness programs. A survey showed that nearly half of all employers store data about employees' wearable devices. While health insurance continues to be driven largely by rising prices, employers are increasingly looking at alternative payment methods to help their employees.
The Congressional Budget Office predicts that in the next ten-years, the number Americans who receive health coverage through employer-sponsored programs will remain at the current 159 million. Health insurance will still be tax-favored. In 2019, however, the cost for single coverage will exceed 9.86 percent of household income.
Premiums include not only the cost for health insurance but also the cost of deductibles. An estimated 25% of workers in the United States have a minimum $2,000. In the US, around 25% of workers have a minimum $2,000. The self-insured policy saves money when there are fewer claims. However, if the claim exceeds expectations, the employer may have to pay more.
Small group rates are determined based on the employees' age. Massachusetts has a median annual income of $1186 for workers younger than 25 and an average annual income of $6,896 for those older.
Larger employers have greater control of plan coverage. Most large employers offer a biometric screening to their employees. They offer a wellness program, which encourages employees visit lower-cost providers. The public sector also has the ability to tailor health care plans for employees.
The Affordable Care Act will shift employers with 51 to 100 employees into a merged health insurance market in 2016. These employers can expect premiums to rise by as much as 9 percent. State governments are also required to set a rate annually. For those who fail to offer affordable plans, a $3480 annual penalty will be imposed.
In order to comply with the ACA, some small employers must make additional contributions to subsidize health insurance for their workers. Massachusetts employers are required by law to contribute $50 annually per employee.
Despite these requirements however, there is still a decrease in the number of employers that offer health insurance. After a decade-long period of rapid increases in benefits costs, many small businesses are becoming frustrated at the uncontrollable high cost. Even though the cost of health insurance is not rising for most employers many are still having difficulty keeping employees.
The difficulty of keeping employees on board is growing as the unemployment rate continues to be low. Employers face this problem. Employers will be penalized $2,320 per employee if they do not offer health insurance. Failure to comply with COBRA (a law that requires employers provide ongoing health care for their employees) can result in thousands of dollars in penalties.