In early September, Blue Cross and Blue Shield proposed a 14 percent increase in the premiums Calyx Engineers and Consultants’ employees would pay for health insurance in 2017.
Last week, however, the Cary firm’s 145 employees found out that their insurance rates weren’t going up next year.
Calyx didn’t ditch its insurer. Rather, Blue Cross agreed to scale back the increase. Such private negotiations make up the process of setting health insurance rates for North Carolinians who buy their coverage through their employers.
Still, a zero rate increase is not the norm. Many employees who are now opening benefit packages to review and renew their health care coverage options for next year are seeing rate increases. Several health benefits consultants who advise businesses in the state say they’re expecting average premium increases of about 5 percent next year.
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The rates Blue Cross, the state’s largest health insurer, offers to employees of large businesses is worlds apart from the Durham insurer’s Affordable Care Act rates, which are increasing 24.3 percent in 2017 after rising 32.5 percent this year.
“If any employee goes out on the public exchange and looks at those rates, they should be very happy their employer offers them health benefits,” said John McDonnell, a health benefits consultant with Marsh McLennan Agency in Raleigh.
Single-digit rate increases have held steady for North Carolina’s employer-sponsored health insurance for at least eight years, rising about 40 percent on average over that time, according to the annual N.C. Healthcare Benefits & Cost Survey issued earlier this year.
But while premium increases have stayed steady, other costs have gone up more. Employers are increasingly shifting costs to those who use medical care by offering “consumer-driven” plans with personal health spending accounts and high deductibles.
Deductibles have also gone up on traditional plans offered by North Carolina employers, increasing 14.5 percent for individual coverage in the past year alone, according to a survey of 605 N.C. companies, conducted by CAI in Raleigh and The Employers Association in Charlotte.
This year, the average monthly premium for an individual plan is $531.77, but the employer pays most of the bill, leaving $96.67 to the employee. However, the average deductible on a traditional employer plan has risen to $1,677.51, and the average employee is on the hook for a total of $4,412.01 this year for total out-of-pocket costs, including co-pays and deductibles.
In addition, the number of employers offering financial incentives to employees who exercise regularly, don’t smoke or meet other wellness goals increases each year. In the survey, which was taken last winter and issued in the spring, employers said they are considering the following cost-containment strategies for 2017: increasing the employee’s portion of payroll deductions, adding wellness programs such as nutritional counseling and lifestyle management, and adding non-smoker incentives and smoker penalties.
Rob Krieg, a health benefits consultant with Hill, Chesson & Woody in Raleigh, said he’s seen employers boost monthly premiums by $50 to $100 a month for employees who don’t participate in wellness programs, and slash annual deductibles from $1,000 or $2,000 down to $500 for employees who work with a case manager for wellness or nutrition counseling.
“The thought process for an employer is, ‘You’re the one who’s driving up our claims cost because you have $100,000 in claims every year,’ ” Krieg said. “ ‘Our plan continues to pay it, we’re not making you pay any more, but we want you to at least take advantage of some of these resources that are available to hopefully get your claims under control.’ ”
Since 2011, Calyx has been adding programs to keep down health insurance costs. Such cost controls are increasingly being offered through employer-sponsored health insurance in North Carolina and nationwide. They include health assessments, wellness programs, telemedicine options and price-comparison services to get better deals on medications and procedures.
As a result, Calyx’s medical claims are down from previous years.
“This is definitely what we anticipated, and we’re happy to see the efforts of the strategy we put into place pay off,” said Candace Whisenant, the company’s HR manager.
New this year
North Carolina insurers now offer coverage for:
▪ a range of treatments for autism spectrum disorder. The treatments were mandated last year by the state legislature. Benefits are provided through age 18 and capped at $40,000 a year.
▪ gender reassignment surgery. The coverage is increasingly being offered to limit legal exposure to discrimination lawsuits. The surgery can cost more than $25,000.