— -- Good health is the gift that keeps on giving. Not only do you feel better, you probably paid less for health insurance than some of your co-workers. In recent years, many large employers have passed on the rising cost of health insurance in the form of higher deductibles and co-payments — costs borne primarily by those who use health care.
This year, though, the pain will be shared, according to an analysis by Towers Watson, a human resources consultant. Employers will pass on cost increases primarily through higher employee premium contributions. Towers Watson projects that 66% of companies will increase employees' share of premiums for single-only coverage in 2012, and 73% will increase the share of premiums for dependent coverage. Another survey by the National Business Group on Health found that 53% of employers plan to increase employees' share of premiums, while 39% plan to increase in-network deductibles.
If there's any good news to be found, it's that the increase in overall costs of providing health care to employees has slowed. Tower projects an increase of 5.9% in 2012, down from 7.6% in 2011. Mercer, another human resources consulting firm, predicts that employee health care costs will rise 5.4% in 2012.
That's small consolation, though, to employees whose income hasn't kept pace with the rise in health care costs. In August, personal income fell 0.1% from July, driven by a decline in wages and salaries, according to the Bureau of Economic Analysis.
With open enrollment season underway at many companies, here's what you can expect to see:
•Higher costs for dependents. The health care reform law enacted last year requires health insurers to allow adult children to remain on their parents' health insurance plan until age 26. More than 2.3 million young adults have been added to insurers' plans since the law was enacted, according to the Kaiser Family Foundation. Increasing premiums for dependent coverage is one way employers are dealing that that requirement, says Beth Umland, research director for health and benefits at Mercer.
•More spousal surcharges. It's not uncommon for working couples to compare their employers' health insurance options and sign on to the one with the most generous plan. However, this is a practice many employers want to discourage, since covering more family members increases their costs. Spouses are even more expensive to cover than adult children because they're older and more likely to get sick, says Helen Darling, chief executive of the National Business Group on Health.
Employers are increasingly imposing a surcharge on coverage of spouses who have access to their own employers' plans, says Julie Stone, senior consultant with Towers Watson. Twenty percent of employers surveyed have a spousal surcharge, and an additional 25% are considering it, she says.
That means employees need to take a close look at the cost of adding a spouse to their plans, says Craig Rosenberg, national practice leader for consulting firm Aon Hewitt. If your company has added a surcharge, it may be cheaper for both spouses to use their own employer's coverage, he says.
•More consumer-directed health plans. Employees who sign up for these plans typically pay lower premiums in exchange for a high deductible. The most common type of CDHP is a high-deductible plan with a health savings account. A health savings account allows you to use pretax dollars to pay your out-of-pocket costs, which could be considerable. To be eligible for a health savings account in 2012, you must have a deductible of at least $1,200, or $2,400 for family coverage.
Unlike flexible spending accounts, which offer another tax-advantaged way to pay your out-of-pocket expenses, unused funds in health savings accounts don't have to be forfeited at the end of the year. You can also take the money with you when you leave your job. Some employers contribute to employees' health savings accounts.
In 2012, nearly three-quarters of employers will offer a consumer-directed plan, according to a survey by the NBGH. At 17% of employers, a consumer-directed plan will be the only option. "Overall, these are less-expensive plans" for employers, Darling says.
If you're healthy, a consumer-driven plan can lower your health care costs, particularly if you contribute to a health savings account, Umland says. The health care reform law requires insurers to provide preventive care without charging a deductible or co-payment, so you won't have to pay for things such as cancer screenings, blood pressure tests and flu shots. You should, however, have the resources to pay the full deductible in the event of an accident or illness.
Many employees offer modeling tools that allow you to estimate your out-of-pocket costs, Umland says.
•More pressure to sign up for wellness programs. Employers will continue to offer workers cash or other incentives to take health assessment surveys and get screened for potential problems, such as high blood pressure or elevated cholesterol. In addition, a small but growing number of employers are penalizing workers who decline to participate in such programs, either by refusing to cover them or charging them a higher premium, according to Towers Watson.
"There's a lot of debate on that topic now about whether incentives or penalties or some combination makes sense," Stone says. "A lot of it varies by culture of the organization. An employer might have a surcharge for smokers, or they may position it as a discount for non-smokers."
In King County, Wash., county employees who take a health assessment pay lower deductibles and co-payments.
Employees who follow through with a 10-week health-improvement program get an additional discount. The county says the program, launched six years ago, will reduce health care costs by $23 million this year.