Health Care

Employers see 8% rise in health costs

Employers saw an average 8 percent increase the last time they renewed health insurance, according to a new survey, with the average annual cost per employee at $8,211.

The survey, from United Benefit Advisors, says the cost was lower in the central part of the United States, where the average annual price tag was $7,327. That's up from $6,858 in 2009 and $6,675 in 2008.

The survey, conducted from Oct. 1 through June 4, is based on plan data from 11,413 employers who are clients of the 145 independent benefit advisory firms that are members of United Benefit Advisors.

It is done to give the employers a way to benchmark their plans against those of similar employers, based on size or type of business.

The survey "is by far the largest sampling" of its kind, said Gary Hardman, president of Hardman Benefit Plans. The company is the sole United Benefit Advisors member in the Wichita area; the only other Kansas member is in Overland Park.

In Kansas, the cost of health insurance was slightly less than for the rest of the central region, at $7,317 annually.

But the rate of increase was higher — 9.3 percent, compared with 7.5 percent for the region.

"I'm not sure why that trend is there," Hardman said.

He said it's too early to tell what costs will do for the next plan year, which for most employers begins Jan. 1. But he said insurance companies have been forecasting medical trend increases of 9 to 11 percent plus additional increases of 2.5 to 7 percent for factors related to the Patient Protection and Affordable Care Act.

The costs in the UBA survey are higher than those in another recent survey, by Kaiser Family Foundation and the Health Research & Educational Trust. Those groups surveyed 2,046 public and private employers chosen at random.

As with the Kaiser survey, the UBA survey showed that preferred provider organization and health maintenance organization plans dominate, with more than 80 percent of all employees covered by one or the other.

In Kansas, 76 percent of employees are covered by a PPO and 21.4 percent by an HMO.

Employers continue to shoulder the majority of health insurance costs, the survey showed, paying $4,753 per employee on average. In Kansas, the employer share was $4,344 — 59.4 percent of the total.

Among employers, those who had 500 to 999 employees had the highest monthly premiums, for both single employees and for families. The Kaiser study also found that average premiums were higher for workers in larger firms.

By industry, premiums were highest for government and education, and for health care and social assistance.