Enjoy it while it lasts: Workers’ wages are growing faster than the cost of work-based health insurance.
According to the Kaiser Family Foundation 2022 Employer Health Benefits Survey, average wages rose 6.7% this year and family insurance premiums rose an average of 1%. This follows his 5.1% wage increase in 2021 and his 4% increase in family insurance premiums.
These trends represent a major reversal in employer-sponsored insurance covering nearly 159 million Americans. From 2002 to 2012, the annual rate of increase in premiums, along with employee contributions to premiums, rose twice as fast as his earnings to triple his rate.
These rising costs, along with increasing deductibles and copayments, are steadily shaving down household budgets.
Kaiser cited two factors that contributed to the slowdown in premium growth. The temporary reduction in medical services during the pandemic and the fact that many insurance rates have been set for his summer and fall of 2021.
This means that the grace period can end quickly.
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When the survey was recently released, Kaiser CEO Drew Altman said, “This is a storm, as recent inflation suggests a larger uptick is imminent. It may be the silence before the
In Plano, Texas, price pressure is already mounting as city employees must contribute more than 15% of their healthcare costs in 2023.
Plano workers haven’t faced a premium increase since 2015. But the city said he had devastating claims in 2021 and he had 22 and couldn’t use reserves to keep premiums as constant as they did this year, Plano’s management service said. says Andrea Cockrell. manager.
“For the most part, people understand that,” Cockrell said of the double-digit increase. I have.”
Plano’s benefits remain generous as the city covers 90% of premiums in one coverage. This compares with employers nationwide paying an average of 83% of employee-only premiums, according to Kaiser research.
Plano workers pay $485 a month for family compensation, plus $63 a month, and the city contributes $1,825 a month. Plano’s annual premium for family insurance is about 5% lower than the national average, after the 2023 price increase.
“We feel we have a competitive advantage,” said Cockrell. “The difficulty is that our income is more constrained than the private sector.”
Consider AECOM, a large global infrastructure company that moved its Los Angeles headquarters to Dallas last year. With revenues of $13.3 billion for fiscal 2021, he is investing heavily in health insurance to help reduce the burden on his employees by more than half.
AECOM said it will cut family insurance premiums by 40% to 70% in 2023, depending on the health insurance plan chosen, and slightly lower singles premiums.
Employees with families can choose a plan with lower deductibles and copays at $100 a month per person, according to a company spokesperson. A single employee can take advantage of plans with higher deductibles for less than $25 per month.
Shirley Adams, AECOM Chief Human Resources Officer, said:
Adams said the company has surveyed what is important to its employees. It was as easy as that.
Affordability continues to be an issue for many who receive work-based coverage, especially those working at small businesses, Kaiser said. Nearly half of small business employees have deductibles of $2,000 or more per year on a single coverage. That’s twice his rate in big companies. Premiums may also be out of reach for low-wage workers, Kaiser said.
AECOM said the premium cuts will affect about 20,000 employees in the United States, including more than 1,200 in Texas and more than 300 in Dallas. Adams declined to disclose how much money AECOM will spend on the effort, but said it has the board’s support because investing in people is a strategic priority.
“Attracting and retaining top talent is the lifeblood of our business,” says Adams.
It is also important for maintaining strong growth. AECOM reports operating profit for the quarter ended June was $183 million, up 14%. Total backlog exceeded $41 billion, including 10% growth in his design business.
“There are great job opportunities,” says Adams. “What can limit our growth is our inability to attract and retain people.”
Many companies are concerned about filling vacant positions and reducing the number of retirees. Nationwide on the last business day of September, he had 10.7 million job openings, up 437,000 from August, according to the U.S. Bureau of Labor Statistics.
More than 4 million people lost their jobs in September, a number that has continued for more than a year.
A very high turnover rate could at least dampen the impact of rising health insurance premiums on employees. .
AECOM does not expect the job market to ease anytime soon. In addition to reducing health insurance premiums, the company seeks to foster a strong culture by offering wellness initiatives such as flexible work schedules, professional development, and yoga classes.
“The best talent is always in short supply,” says Adams. “If you cross your fingers and hope it goes away, you’re making a big mistake. We’re actively working on it.”
