INSURANCE: Be on alert during open enrollment

INSURANCE: Be on alert during open enrollment

Some employers may be raising insurance premiums and employee cost-sharing. Other things to watch for in health plan options: more co-insurance and extra charges for dependents.

By Michelle Andrews, Special to the Los Angeles Times

November 1, 2010

When you examine your health plan options during open enrollment this fall, you may suffer a serious case of sticker shock. Some employers are planning to implement frighteningly big increases in both insurance premiums and the cost-sharing for services that comes out of your pocket. Even benefits that are expanding under the healthcare overhaul may come with financial strings attached.

If you're one of the roughly half of workers with a choice of more than one health plan, or if you're just trying to gauge what you may have to pay to keep your family healthy next year, here's what to look out for:

Higher premiums

The employee's share of the average $13,770 total premium for family coverage went up 14% this year, to $3,997, according to the annual employer health benefits survey conducted by the Kaiser Family Foundation and the Health Research and Educational Trust, which was released last month.

In the last five years, employees' premium contributions have grown 47%, while overall premiums increased 27%. Workers' relative share of the premium for family coverage grew to 30% this year, up from 27% last year.

Higher deductibles

More than a quarter of employees now face annual deductibles of at least $1,000, according to the Kaiser/HRET study. To soften the blow, some plans offer a health savings account, or HSA — an option that lets you sock away money tax-free to cover healthcare expenses.

Katie and Ricky Harbaugh's health plan comes with a $5,000 deductible. When their daughter Kylie was born last year, they got hit with roughly $7,000 in out-of-pocket costs, including 20% co-insurance for the time Katie and Kylie spent in the hospital. In previous years, Katie's company made a $4,500 contribution to her HSA to help cover the deductible. But last year, her employer eliminated the HSA, along with its contribution. The Hagerstown, Md., couple is still paying off the medical bill.

More co-insurance

When you visit your primary care doctor or a specialist, it's likely you'll still be charged a flat co-payment in the neighborhood of $20. But increasingly, health plans are adding co-insurance for specific types of services, which means you'll also pay a percentage of the total charges.

For example, 53% of plans now require co-insurance charges for hospital admissions, up from 42% two years ago, according to the PricewaterhouseCoopers Health and Well-Being Touchstone survey of 700 companies. Co-insurance is also on the rise for prescription drugs and emergency room visits, according to the survey, which was released in June.

Typically, co-insurance isn't charged after you've reached your plan's out-of-pocket maximum, says Mike Thompson, a principal in PricewaterhouseCoopers' human resources practice. But that out-of-pocket limit may still be more than you can afford, he adds. "As employees make their choices, it's important to say, 'If the worst happens, how much would I have to pay out of pocket?' "

Extra for dependents

The healthcare overhaul gave parents the option of keeping their adult children on their policies until they reach the age of 26, but there's likely to be a price tag associated with that, benefits consultants say. Increasingly, plans are charging for each dependent on a plan rather than including an unlimited number in a single family premium.

Workers may also see more of another strategy to limit costs: surcharges, typically ranging from $200 to $500, for spouses who could get insurance through their own jobs. "If you have coverage available somewhere else, they want you off their books," says Sara Taylor, health and welfare solutions leader at Aon Hewitt.

Emphasis on wellness

Even with costs rising, you may be able to make some health-plan changes work to your financial advantage next year — and get better care at the same time.

Most employers already have wellness programs of some sort. They may offer smoking cessation or weight management classes, for example, or discounts on gym memberships. Next year, employers expect to beef up their wellness programs, hoping to save money by keeping employees healthier, according to a survey released in September by the human resources consulting firm Mercer.

Increasingly, employers are linking health insurance costs with employee participation in wellness programs. For example, employers may give workers a break on premiums or deductibles if they meet certain targets for healthy blood sugar, blood pressure and cholesterol levels, says Tracy Watts, a partner at Mercer.

As companies try to get a handle on the costs of treating chronic diseases, they're also dangling the possibility of access to better, cheaper insurance for employees who take certain steps. For example, workers who fill out a health-risk assessment might pay slightly lower premiums for the company's core plan. If the questionnaire identifies them as having a chronic condition that needs treatment — and if they participate in a disease management program and work with a health coach to keep their disease in check — they might "graduate" into a plan with better benefits and lower cost-sharing.

Some may dislike the Big Brother approach, but companies aren't apologizing. "The problem [with voluntary programs] is that people don't participate," says Watts. "So they're trying different strategies."

Kaiser Health News is an editorially independent news service and a program of the Kaiser Family Foundation, a nonpartisan healthcare policy research organization. Neither Kaiser Health News nor the foundation is affiliated with Kaiser Permanente.

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