Companies Prepare to Pass More Health Costs to Workers: Companies are raising workers' premium contributions and shifting other costs, in part because of obamacare
By Theo Francis | The Wall Street Journal, November 25, 2013
Some are dealing with rising expenses by making employees pick up a bigger share of the premiums for coverage of family members. Employees this year are responsible for an average 18% of the cost of individual coverage, but 29% of the cost of family coverage, according to a survey of employee health plans by the Kaiser Family Foundation and the Health Research & Educational Trust.
"We have seen employers do more cost-shifting, if you will, for an employee to pay a higher portion of the cost of dependent and spouse coverage," said Tracy Watts, U.S. health-care reform leader at Mercer, a benefits consulting unit of Marsh & McLennan Cos.
Between 15% and 20% of eligible workers nationwide tend to skip insurance, benefits consultants say.
Towers Watson & Co., a benefits consulting firm, figures that about half of the usual opt-outs will sign up for next year—meaning an enrollment increase of about 7% or 8%, and a corresponding increase in costs of about 5%.
Haverty Furniture, an Atlanta-based retail furniture chain with stores in 17 Southern and Midwestern states, expects health-care costs to rise by about $2 million, or 20%, next year.
The company expects the bulk of that to come from enrollment increases, and it is raising premiums, deductibles and copayments in response, Chief Financial Officer Dennis Fink said.
"We do think our per-capita cost is going up, but the bigger piece is just people who've chosen not to have coverage," he said.
A quirk of the Affordable Care Act could make it more appealing for companies to raise rates for family coverage than for individuals, said Vivian Ho, a Rice University health-care economist.
Starting in 2015, companies employing 50 or more people must offer affordable health-care coverage to anyone working 30 hours a week or more.
But affordability is measured using the cost of individual coverage, capping the cost at 9.5% of income, Ms. Ho said.