Large employers are getting their premiums under control, but you’re probably paying more

With all the talk about rising premiums, a new report from the ADP Research Institute this morning might surprise you.

The average monthly premium cost for large employers rose just 1.7 percent this year, according to the ADP Research Institute. The average cost has risen 15 percent over the past five years, but this year’s increase was the smallest in that time.


(ADP Research Institute)

ADP said it's not totally clear what's behind the slow increase this year. The group's researchers said it could be a combination of employers moving to more high-deductible plans, consumer-driven health plans and having employees take on more of the costs.

"The biggest finding for me is, it's how steady the larger companies are dealing with their health premiums," said ADP vice president David Marini. "The report this year was pretty steady and no major fluctuations."

But it also means that you're probably paying more. This chart shows that the employer contribution has been gradually declining for all age groups in the past five years:


(ADP Research Institute)

ADP drew the data from 200 anonymous client organizations representing large employers (1,000 or more employees) across different industries. Most of the companies' health plans are self-funded.

There’s another interesting dynamic taking place with employer plans. The percentage of workers under 30 taking employer-sponsored insurance dropped 7.6 percent in the past five years, which ADP said could partially be explained by the Affordable Care Act provision letting young adults stay on their parents’ plans until age 26. About 3 million young adults have taken advantage of that provision so far, according to the Obama administration.

Meanwhile, the same age group saw the highest increase in eligibility for employer-sponsored plans over five years (3.4 percent) and just the smallest decrease in employer contributions toward their premiums (.1 percent). Large employers are focused on getting a younger, healthier population into their risk pool, and they still see attractive benefit packages as a great tool for attracting and retaining young talent, Marini said. Still, just more than half of the under-30 crowd takes employer-sponsored insurance.

At the same time, the average age of the workforce electing employer-sponsored insurance is getting older. People between 50 years old and 59 years old had the highest participation rate (73 percent) in employer plans, while employees 60 and older had the greatest participation increase in the past five years (1.8 percent). People in the 50-59 age range also saw the largest decrease in employer contribution to their premium (1.7 percent).

 

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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