US employee benefit report reveals insurance price increases
Businesses in the US are coping with steep premium increases for employee benefits by offering a greater variety of plans that span a wider range of pricing. This is according to the first annual SMB Benefits and Employee Insights Report from Ease, a provider of benefits and HR administration software for small businesses, powered by insurance brokers.
“With premiums on the rise nationwide, business owners are clamouring for ways to control costs while still offering quality benefits to valued employees,” said Ease co-founder and CEO David Reid. “We’ve found that businesses are combatting this financial pressure, which impacts businesses and employers alike, by offering more plan options than ever before. The West Coast is leading this trend, which we expect to proliferate throughout the country in the coming years.”
The report, which draws on the data of 70,000 small businesses and 2 million employees nationwide, found West Coast businesses offer double the number of health plan options – over six options, on average – of businesses in other parts of the country.
The report also found that the Northeast leads the nation in premium increases and high rates. Medical premiums have been on the rise for both individuals and families, with individual premiums up 37.4 percent in the past three years.
The report found that plan variety has not yet led to selection changes. Among the varied plan options, many businesses are offering high deductible health plans, which are still in the early adoption stage, mostly among millennials who seek them as a low-cost option. Preferred provider organisation plans, however, continue to be the most selected plan type across generations.
The percentage of employees waiving coverage has remained steady, despite the repeal of the individual mandate.
The report also noted an increase in use of voluntary benefits. Interestingly, the Northeast leads the pack in adoption, further increasing the already high price individuals and families are paying in that region.
More individuals have life insurance through their employer than dental or vision coverage, with all three hovering around a 20 percent adoption rate. This is likely due to employer contributions: employees bear a heavier burden for vision and dental than other insurance types.
“As unemployment remains low, employers continue to look for ways to remain attractive to current and prospective employees using benefits,” said Reid. “However, the rising costs of these benefits is consequential. Many businesses are opting for tech solutions that can streamline some of the more time consuming, and therefore costlier, aspects of the benefits process.”
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