Colorado employers facing double-digit health insurance hike
By Dan Cook
Working on the 2014 budget? If you’re a Colorado-based employer, it would be prudent to kick in a little extra on the line item for health insurance.
A survey by the Lockton Denver Benefit Group found that the average Colorado employer’s health insurance bill will increase by nearly 11 percent next year. That’s kind of a shocker, coming on the heels of a very low 2013 increase of 7.4 percent over the prior year. While double digit hikes aren’t uncommon in Colorado, after two years of single digit boosts, employers may have held out hope for a kinder 2014 rate increase.
In Colorado, the burden of health insurance is falling hard on all parties. The forecasted rate reflects the cost before plan design changes and consideration of other options to hold costs down. Employers reported that they are taking multiple steps to try to whack back the double-digit increase, but employees are the ones who will suffer most from the whacking.
“The average increase after plan changes, increases to employee percentage cost share, and/or changing carriers was 6.4 percent, up from 5.3 percent in 2013,” Lockton reported. “It should be noted that this level of cost reduction (from the earlier stated 10.9 percent) has required employers to utilize multiple tactics at once, shifting much of the cost burden to employees. In the context of the report's average merit pay increase of 2.6 percent, this cost of coverage for employees may be difficult to bear.”
The survey also revealed that:
- 86 percent of employers expect to pass a percentage of their cost increase on to their employees, up from 75 percent last year.
- 38 percent of the employers surveyed offer a health savings account/high deductible health plan.
- 22 percent of those without a health savings account plan are considering offering one in 2014.
- Employers offering an HMO increased to 30 percent (up from 26 percent last year), most likely due to Kaiser’s expansion in the state as well as employers viewing an HMO as a cost containment measure, Lockton said.
Originally published on BenefitsPro.com