Health Insurance

Many employees hit with higher health care premiums

Nanci Hellmich

More employees are getting hit with higher health insurance premiums and co-payments, and many don't have the money to cover unexpected medical expenses, a new report finds.

More than half of companies (56%) increased employees' share of health care premiums or co-payments for doctors' visits in 2013, and 59% of employers say they intend to do the same in 2014, according to the annual Aflac WorkForces Report. It's based on a survey of 1,856 employers and 5,209 employees at small, medium and large-size companies.

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In 2013, 19% of companies implemented a major medical plan with a high deductible (more than $1,000) and Health Savings Accounts as an alternative to a traditional medical plan, the study finds.

Frederic Cirou | Photoalto | Getty Images

Employees are worried about covering their medical costs: 49% have less than $1,000 to pay for unexpected out-of-pocket medical expenses; 53% would borrow from their 401(k)s or credit cards to cover unexpected medical costs; 66% say they wouldn't be able to adjust to the large financial costs associated with a serious injury or illness.

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The survey also showed 69% of workers at least somewhat agree that they regularly underestimate the total costs of an injury or illness, including medical, household and out-of-pocket expenses.

Many employees are in a "fragile financial situation" and couldn't afford the out-of-pocket expenses of many medical situations, says Matthew Owenby, vice president of human resources for Aflac, a provider of supplemental insurance, such as accident, cancer, critical illness, dental and vision.

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Some companies are already offering high-deductible plans and, "I think we'll see more of this in the future," he says.

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The need to control costs is driving many companies' decisions on benefits, Owenby says. The report shows that almost half of employers (49%) agree that controlling costs is the primary objective, and took steps to contain costs, including:

• 39% hired independent contractors or consultants.

• 32% eliminated or delayed raises.

• 22% eliminated or cut back on benefits.

• 21% changed some full-time workers to part-time workers.

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The report notes that the Kaiser Family Foundation finds that health care premiums have increased 80% since 2003, nearly three times as fast as wages (31%) and inflation (27%).

By Nanci Hellmich, USA Today