Group Health Insurance Market Unchanged from Fall 2007

WASHINGTON – Employee benefits consultants report little change in the market for group medical insurance in the past six months, with small, medium and large employers continuing to shift rising costs to their employees in an effort to rein in the bill for health coverage.According to the spring Employee Benefits Market Survey by The Council of Insurance Agents & Brokers, the cost of group medical care is increasing at almost the same rate as was reported in November 2007 for renewals, regardless of the size of the account. 

In the latest survey, benefits consultants said 85 percent of renewals for small accounts, those with 50 or fewer employees, experienced cost increases, with the bulk of the hikes (46 percent) falling in the 11-15 percent range.  For medium accounts – those with 51 to 500 employees – 90 percent of accounts experienced increases, with 36 percent seeing increases of 6-10 percent, and 39 percent experiencing increases in the 11-15 percent range.  

Three-quarters of the large accounts, those with 501 or more employees, also experienced premium hikes for their group health policies, with most increases (46 percent) falling in the 6-10 percent range.“Most price renewals come out in the high teens and then are driven down through plan changes and competitive data,” one benefit consultant reported. 

Among the changes frequently adopted by employers to keep their medical expenses in check were higher deductibles and co-pays, increased employee share of premium costs and assessing prescription drug co-pays.  Eliminating group medical coverage was the least popular cost-control option, with most brokers reporting that their clients seek other ways to address the expense issue.  

“The overall trend is to push for plan changes that increase the employee cost share, whether it be on the medical side or the prescription drug side of the account,” said another.Although still not a universally popular option, the brokers said more clients were expressing interest in moving all or part of their health benefits programs to high-deductible health plans coupled with a health reimbursement account or a health savings account to help control costs.

Of the clients who were picking HDHPs coupled with HSAs, most were using it as a plan option rather than a replacement for an existing plan, the brokers said, and the most common employer contribution toward the cost was $500 to $749 per employee.

The benefits consultants said renewal rates for group life insurance were unchanged or down slightly for all sizes of businesses.

To view the full survey results, click here.

 

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Founded in 1913, The Council is the premier association for commercial insurance and employee benefits intermediaries.  The Council represents the leading commercial brokers and agents in the United States and abroad.  Council members annually place 80 percent of all commercial property/casualty premiums in the United States and administer billions of dollars in employee benefits accounts.  www.ciab.com

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