My Employer Once Again Hikes Health Insurance Premiums During Open Enrollment

5 comments

It’s that time of the year again. Open enrollment. It’s also fall, but as this is a personal finance blog, weather is not the focus. My current employer, a Fortune 500 firm, recently released their 2013 contribution rates (i.e health insurance premium) for it’s employees and once again rates are rising. Their justification is that health care costs are going up, but in reality the bigger driver of costs is that my less than charitable employer is paying less of the coverage premium and shifting more of the burden on to it’s employees. Private health insurance is still much more expensive, so I don’t really have any choice but to accept the circa 5% premium increase for my family health plan. Furthermore my premium increases is line with the 5.5% rise for large employer-sponsored health plans based on a  recent PwC industry report, so I guess I cannot complain too much. Still the 5% increase, equivalent to about $500 for the year, means a few less extravagances in 2013.

Plan Option

Coverage Levels

$ Increase From 2012

% Increase From 2012

Participant Only

Participant + 1

Participant + Family

Aetna Choice POS II (PPO)

$40.24

$83.11

$126.32

$2.00 – $7.49

4.2% – 5.1%

Aetna Choice POS II Plus/OOA

$54.11

$144.18

$198.52

$2.50 – $9.68

4.4% – 5.3%

Aetna Select
(or Blue Cross Blue Shield)

$77.05

$186.91

$243.65

$3.55 – $11.77

5.0% – 5.3%

Aetna HealthFund

$27.16

$52.30

$88.26

$1.21 – $4.48

4.8% – 5.3%

Kaiser HMO

$49.63

$161.81

$217.13

$2.41 – $10.18

4.9% – 5.2%

Dental

$6.49

$14.83

$22.51

$0.17 – $0.66

2.7% – 2.8%

Vision

$0.92

$2.22

$3.31

No change

No change

Here are some other changes in 2013 that impacted my family and likely will affect most American families with health insurance:

Health Care Spending Account (HCSA) or Flexible Spending Accounts (FSA) contribution maximum reduced by 2,500. Beginning Jan. 1, 2013, the limit on pre-tax contributions to FSA or HCSA will be reduced from $5,000 to $2,500 per year. Because of this regulatory change, all employees will have to re-elect for participation during Annual Enrollment.  If no action is taken, employees will not contribute to a HCSA in 2013 — even if you contributed to one in 2012.

Expansion of women’s preventive health services coverage. For 2013, additional preventive care services for women will be covered at 100 percent thanks to health care law changes. These services include:

  • Well-woman visits (annual visit and follow-up visits as appropriate)
  • Gestational diabetes screening
  • Human papilloma virus testing for women age 30 or older
  • Counseling for sexually transmitted infections
  • Counseling and screening for human immune-deficiency virus
  • Generic, oral contraceptive methods and counseling
  • Breastfeeding support, supplies, and counseling
  • Domestic violence screening and counseling.

Health care cost reporting on 2012 W-2. The cost of your employer-sponsored health coverage will be reported on your 2012 Form W-2, which will be mailed to you in early 2013. This Health Care Reform-mandated change will not impact your tax liability or your earnings summary.

More focus on wellness or get fit programs. Most employer sponsored plans now offer some kind of monetary discount if plan participants partake in some kind of fitness program or demonstrate they are taking actions to stay in shape (normally determined through a questionnaire). The reason is simple: healthy people are less likely to get seriously sick and so the insurance company has to pay out less. Employers, benefit from healthy employees due to higher productivity (less sick days for example) and it also decreases the amount of money they spend on health coverage. So if you can take advantage of these programs, do so. It is good for your well-being, employer and your wallet.

Summaries of Benefits and Coverage (SBCs). As mandated under Health Care Reform, your employers need to provide you with a SBC for each offered medical plan option. An SBC is a snapshot of medical plan provisions, in a government-prescribed format. SBCs do not replace Summary Plan Descriptions, which are more detailed plan descriptions.

The most important thing in the long term, is to educate yourself about health insurance options and all the key terminology/concepts. Not only will it save you money in choosing the best option, it will help during the year when dealing with doctors, hospitals and billing staff when trying to figure how much you will or should pay for medical services. A good place to start is the educational information offered by your company and their insurer (online or via open enrollment meetings).

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{ 5 comments… read them below or add one }

justin@thefrugalpath November 3, 2012 at 11:34 pm

My wife said that our insurance is going to go up this year, but we’re not sure by how much. Last year’s stayed the same as the year before, but they added a bunch of hoops that we had to go through. It’s pretty obnoxious, we have to take some test online, wear pedometers everyday to earn points and upload them to some website, get some screenings done. I suppose that by doing this it’s meant to keep us healthier, but it sure is a pain.
The other option isn’t worth it though (not having health insurance at all).
Good luck with your plan.

Reply

Ren November 1, 2012 at 5:01 pm

Looks like my premium is going up 18.4% for my kids (thankfully, my cost is $0; my wife is on her own plan). This is for HDHP w/ HSA and even with the increase, it’s still far less than the alternatives.

Interesting though not really relevant to anything, the HSA contribution limit increased by just slightly more than my premiums increased (in $, not %).

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Andy (Author) November 1, 2012 at 8:53 pm

Ouch! Big jump. I have been hearing about a range of increases. Yeah, companies having been getting stingy re HSA plans as too many people were taking advantage of them.

Reply

Kurt @ Money Counselor November 1, 2012 at 10:40 am

In my opinion you’re lucky to see only a 5% increase. When my wife and I had the misfortune of being in the US private health insurance market, we saw our annual premium increase by an average of 19% per year for the three years 2007 to 2009. Our four-figure deductible also was bumped up each year. Combining our premium and deductible, in 2009 we would have paid nearly $12,000 toward health insurance and care before the insurance paid one cent. We were both healthy–no chronic illnesses, etc., and my wife is beyond child-bearing years–and made no claims during this period.

We solved the problem by moving to Canada.

Reply

Andy (Author) November 1, 2012 at 8:52 pm

Nice. No doubt health care costs will keep rising unless there are further structural changes. Obamacare may not be perfect by any means but at least it is a step towards change. Unfortunately Canada is not option for me. LOL.

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