5 things to know about the state of employer-sponsored health coverage

A modest rise in premiums, a big increase in deductibles and a move away from paid provider organization (PPO) plans are among the notable results in the annual survey on employer-sponsored health benefits from the Kaiser Family Foundation and the Health Research and Educational Trust (HRET).

Including results from more than 3,100 large and small employers (about 1,900 of which answered all the questions), here are five takeaways from the 18^th edition of the survey:

1. More healthcare costs are being shifted to employees

For the first time in the history of the survey, 51 percent of all covered workers face deductibles of at least $1,000 per year for single coverage, including 65 percent of workers at companies with between three and 199 employees, whose average annual deductible was more than $2,000.

The overall average deductible in 2016 was $1,478, up nearly 49 percent from 2011 and 12 percent from 2015.

“Whether high-deductible health plans are a good thing or a bad thing is a question without a simple answer,” said Kaiser Family Foundation President and CEO Drew Altman. “They’re cheaper. They’re likely good for some people and bad for other people. Our analysis shows they’ve helped to hold premium growth down.”

Deductibles have increased 63 percent over the past five years, far outpacing 19 percent growth in premiums and 11 percent growth in workers’ earnings. Altman said this illustrates the trend in health insurance to less comprehensive coverage where enrollees have more “skin in the game.”

“I think it is the biggest change in healthcare in America that we’re not really debating,” Altman said. “It may even be more important than the (Affordable Care Act) in terms of the number of people affected.”

2. Premium growth has slowed

The survey reported only a “modest increase” in premiums for employer-sponsored family coverage in 2016 (up an average of 3.4 percent to $18,142 annually). Though that small rise still outpaced growth in wages (2.5 percent) and inflation (1.1 percent), premiums aren’t going up as rapidly as they did between 2006 and 2011, when there was a 31 percent average increase, or the 63 percent average between 2001 and 2006.

“This year’s survey shows that premium growth remains low and really strikingly low if you’ve been watching this for as long as I have,” Altman said.

3. ACA requirements didn’t lead to more part-time workers

Companies with 50 or more full-time equivalent employees were required by the Affordable Care Act (ACA) to offer health coverage to full-time workers in 2016.

The fear had been employers would duck this mandate by reducing workers’ hours, potentially increasing the ranks of the uninsured, but the survey didn’t find that to be the case.

“There’s no evidence of employers shifting workers to part-time status because of the law. We’re just not seeing that. In fact, to the extent we’re seeing shifts, and they’re very small, they’re in the other direction,” Altman said.

More employers who offer health coverage and meet that 50 full-time equivalent workers threshold said they shifted or plan to shift workers’ hours from part-time to full-time status to make them eligible for health benefits (7 percent) than shifted employees to part-time status to avoid the requirement (2 percent).

4. Fewer companies are using PPOs

While paid provider organization (PPO) plans are still the most popular coverage, enrolling 48 percent of covered workers, the PPO share has declined 10 percentage points since 2013.

At the same time, coverage through high-deductible plans has increased by 8 percentage points to 29 percent in the 2016 survey. 15 percent of covered works were reported to be enrolled in health maintenance organizations (HMOs).

5. Coverage for retail clinics and telemedicine is more available

Among the larger firms with more than 200 employers which offered health benefits, 73 percent offered plans which included coverage at retail clinics and 39 percent covered delivery of care through telemedicine. For employers with less than 200 workers, those options were less common, with 60 percent covering care at retail clinics and 20 percent covering telemedicine. On-site health clinics were relatively uncommon, though a quarter of firms employing more than 1,000 people reported having them.

Having coverage options beyond the usual visits to a primary care provider appeared to be in greater demand among companies surveyed.

“Employers continue to focus on wellness and prevention programs, things such as smoking cessation, weight loss programs, lifestyle coaching, all things designed to help employees manage their own health care costs,” said Ken Anderson, DO, MS, chief operating officer of HRET.