More midstate employers pay staff to waive health insuranceSurvey also finds increasing movement away from spousal coverage
An increasing number of midstate employers offer cash compensation to employees who agree to waive medical and prescription drug insurance, a new survey has found.
The average pay-out for such arrangements is $2,047 per year, according to research by Conrad Siegel Actuaries, an employee benefits and consulting company in Susquehanna Township, Dauphin County.
Conrad Siegel's research also found an increasing trend away from companies offering spousal coverage.
"Employers continue to look for ways to impact cost savings of their health care plans," said Rob Glus, a partner at Conrad Siegel.
"By incentivizing employees to not be on the plan, and sending spouses to obtain coverage through their own employer, employers are able to avoid significant benefit cuts to existing employee coverage," Glus said.
Conrad Siegel's survey, conducted in December, drew on responses from about 110 employers, both nonprofit and for-profit, from sectors including education, health care, government, manufacturing and finance. Of them, more than 60 percent had at least 100 employees.
"Over the last four years, more employers have implemented greater restrictions on spousal coverage and have begun offering high-deductible plan and HSA (health care savings accounts) options," Glus added. "At a high level, this means the responsibility for increased health care costs continues to shift from the employer to the employee."
Here are the key trends that emerged from Conrad Siegel's research.
1. Take the cash, please
The survey revealed that 41 percent of employers offered workers cash in lieu of medical and prescription drug insurance last year, up from 33 percent in 2015.
The average annual payout fell, however, down $36 from $2,083 in 2015.
2. For you and only you
Forty percent of employers have some form of spousal coverage restriction for medical and prescription drug insurance, compared with 33 percent in 2015.
Of them, 25 percent require a surcharge to cover the spouse, and that number is on the rise, too.
In 2016, the average surcharge for spousal coverage was $2,766 per year. That's up from $2,288 in 2015 and $1,730 in 2014.
And 43 percent of those employers will not allow spousal coverage if the spouse has access to health insurance through their own employer.
3. High-deductible plans increase
Eighty-seven percent of the plans offered by survey respondents require an individual deductible, Conrad Siegel found, or a 5 percent increase from 2015.
Those thresholds are rising, too: More than 65 percent of plans had a deductible of $500 or more, a 3 percent increase from 2015.
At the same time, the report shows slow, steady growth for HSA options.
In 2014, Conrad Siegel found, 20 percent of employers offered an HSA to employees and 73 percent funded part of the account.
In 2016, 26 percent of employers offered HSAs to employees and 84 percent funded part of the account.
Similar growth also was found in the combination of high-deductible offerings paired with health reimbursement accounts (HRAs).
4. Co-payments steady
One trend that didn't spike: drug co-payments.
The average price of generic prescription drug co-payments has stayed between $9 and $10, for the past three years, while the price for formulary co-payments has averaged between $30 and $32, and the price for non-formulary co-payments has averaged between $51 and $52.
"Prescription drug co-payments have notably remained consistent for several years, even as employers have turned to other aspects of plans to minimize rising costs," Glus said.
"Employers value having reasonable prescription co-payments because they want employees to have access to the medicines they need to be healthy and productive, and do not want to price employees out from being able to afford this coverage," he added.