Employers responding to continued Rising Costs by shifting More of the Cost Burden to Employees

The 2023 Employer Health Benefits Survey, conducted by the Kaiser Family Foundation (KFF), presents several key findings about employer-sponsored health benefits. Rising costs continue to be the greatest concern driving employers to employ High-Deductible Health Plans and other cost reduction strategies that increase the burden on employees and dependents to access high quality care.  Here are some highlights:

·         Premium Costs: The average annual premium for single coverage in 2023 was $7,221 and for family coverage $22,463.

·         Employee Contributions: Employees with single coverage contributed an average of $1,405 towards their premiums and those with family coverage $6,106.

·         Cost-sharing: The average annual deductible for single coverage was $1,763.  85% of covered workers have a deductible, with higher deductibles more common in small firms.

Primary Areas of Concern are Cost, Prior Authorization, Provider Selection and Access

Four areas of concern among firms offering health benefits include: affordability of cost sharing (58% expressed high or moderate concern) is the greatest concern, followed by ability to schedule timely appointments (49%), complexity of prior authorization requirements (47%) and difficulty finding in-network providers (26%)

High Deductible Plans are replacing Narrow Networks as Preferred Strategy

Narrow networks, as represented by HMOs, have clearly fallen out of favor with employers since their high-water mark 25 years ago (1999), and even PPOs, the dominant form of coverage, have lost market share to high deductible plans with savings options.

·         Just 12% of workers were enrolled in HMOs, down from the high-water mark of 31% in 1996.

·         PPOs remained most prevalent, covering 47% of workers, but down from 57% ten years ago. 

·         High-Deductible Health Plans covered 30% of workers, up from 20% ten years ago.

Centers of Excellence

45% of the largest employers (5,000 employees or more) and 31% of those with 1000 to 4,999 employees are offering “a Center of Excellence for Some Conditions” as compared to 10% of those with fewer than 200 employees.

Wellness Programs

54% of small firms and 83% of large firms offer wellness programs, including programs to help employees stop smoking, manage weight, and reduce stress.

Cost-control Strategies

Many employers have implemented strategies to control rising health care costs, including offering high-deductible plans, wellness programs, and telehealth services  Almost a quarter of employers are planning to Increase workers premium contributions within the next two years, and smaller pluralities plan to move to an HSA-qualified plan, increase cost-sharing, remove high cost providers, increase utilization management or reduce covered services.

ACTION WITHIN 2 YEARS	YES
Increase workers premium contributions	23%
Moving to HSA-qualified plan	12%
Increase cost-sharing	11%
Removing high cost providers	9%
Increasing Utilization Management	6%
Reducing covered services	4%

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