Health premiums up 131% since 1999

There doesn't appear to be any relief for employers when it comes to rising health care insurance costs.

In the last decade, from 1999 to 2009, premiums for employer-sponsored health care have risen 131 percent, according to a recent survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust.

The survey found that premiums for family coverage on employer-sponsored plans rose about 5 percent this year to $13,375 a year.

Ozarks employers continue to deal with increased coverage costs. Local insurance brokers say premiums are rising an average of 10 percent to 15 percent year-to year, and most employers are holding at around 12 percent as they look at renewing their company health plans.

"I have some under 10 percent, and some actually have a rate hold," said Bob Propst, vice president of employee benefits at Springfield-based Barker-Phillips-Jackson Inc. "Those are very few and far between - I don't want to exaggerate that by any means."

Cost-increase fallout

The Kaiser survey polled more than 3,100 randomly selected public and private U.S. firms with at least three employees. Among the respondents that offer employer-sponsored health coverage, 21 percent reported that they reduced the scope of coverage, and 15 percent said they increased the employees' share of the premiums in response to higher costs.

Closer to home, while a handful of Propst's clients are willing to absorb the increased cost for the company health plan, most are comparing rates like never before.

"Everybody this year - just about everybody, even people who have liked their plans - is shopping," said Andrea Croley, co-owner of Springfield-based Croley Insurance and Financial.

Trevor Crist, employee benefits specialist at Nixon & Lindstrom, has seen the trend as well.

"In the past, employers - even if they didn't like the increase - they typically found a way to stay with their carrier if possible just to avoid the process" of switching, he said. "This year, employees are certainly investing the time to look at all the options."

Crist believes the economy is only making the situation more dire for employers.

"It's kind of overwhelming, because even before we got into this economic struggle, (health coverage) was a struggle for employers," he added.

Limited options

Ultimately, employers have little power in the struggle to keep a lid on health insurance premiums.

Beyond shopping around for a plan best suited to their group's needs, their options are to raise deductibles and/or out-of-pocket expenses, scale back on coverage, pass the expense on to employees or drop coverage entirely.

Just 2 percent of the Kaiser survey respondents indicated that they are likely to drop coverage altogether as a result of increased costs, Propst and Croley say none of their clients have opted to eliminate health coverage for their employees.

"I know I've got a lot of employers that have talked about it, but we haven't had any employers that have said, 'Hey, we're just going to give up the ghost,'" Propst said.

Crist, however, has seen a few clients resort to retaining coverage at the expense of laying people off or doing away with health insurance entirely.

"It gets to a point where they have to ... make a decision between health insurance and keeping their doors open," Crist said.

But most of his clients have found other alternatives.

"They're going to higher deductibles, higher out-of-pockets, scaling down prescription programs - those have been probably the most popular methods for reducing those health care costs," he added.

No quick fix

While each of the brokers cited wellness programs as a potential cost-savings maneuver, they said such programs don't help in the short term and typically offer a better result for larger groups.

The programs offer incentives for health improvement activities, such as smoking cessation and weight reduction. Over time, that can mean a healthier pool of employees, which could reduce the number of claims and can eventually reduce the cost of insurance premiums.

"That's not a quick fix and that's not a guarantee" that rates will eventually drop, Propst said of wellness programs. "We've implemented one here (at BPJ) and we still have seven or eight smokers who ... want to smoke. That's just the way it is," Propst said.

Other ideas, including surcharges levied when an employee's spouse who could be covered on another employer's plan is covered by the employee's policy, remain somewhat scarce, he said.

"That takes a little bit of policing and creates a little bit of employee unrest," Propst said.

While hopes may be pinned on some sort of health care reform emerging from Washington, D.C., in the coming year, Propst and other brokers don't expect it to have an impact on rates in 2010.

"It's going to be interesting to see what options are going to be for us in the next year or so," Propst said.