Important Changes Are Underway in the Quickly Evolving Insurance Industry

While it was widely predicted that the federal health care law would destroy the employer-provided group health insurance market, most companies continue to provide health benefits to their workers. Over 90 percent of employers that have at least 50 full-time equivalent employees and are subject to the employer mandate are offering coverage. Further, there is little evidence that companies are reducing workers’ hours due to the law’s requirement that they offer health insurance to full-time employees.

Despite the strength of the employer market, important changes are underway that may make employees think twice about what health care they use. Employers are shifting more health care costs onto workers, which is in turn causing a slowdown in premium increases. However, the trending moderation in premiums is not being realized by the average worker because many employees are paying a greater share of their medical bills than ever before. Deductibles have experienced considerable increases and are 50% higher than they were five years ago. Employers should be mindful that workers may expect pay raises to compensate for their increasing healthcare costs. Alternatively, companies may find that employees will accept better health benefits in lieu of a higher salary, which could translate to savings for the employer.