Premiums Up 9% in 2011

Annual premiums for employer-sponsored family health coverage increased to $15,073 this year, up 9% from last year, according to the Kaiser Family Foundation/Health Research & Educational Trust 2011 Employer Health Benefits Survey. On average, workers pay $4,129 and employers pay $10,944 toward those annual premiums.

Premiums increased faster than workers’ wages (2.1%) and general inflation (3.2%). Since 2001, family premiums have increased 113%, compared with 34% for workers’ wages and 27% for inflation.

The survey estimates that employers added 2.3 million young adults to their parents’ family health insurance policies as a result of the health reform provision that allows young adults up to age 26 without employer coverage on their own to be covered as dependents on their parents’ plan. Young adults historically are more likely to be uninsured than any other age group.

The study also finds 31% of covered workers are in high-deductible health plans, facing deductibles for single coverage of at least $1,000, including 12% facing deductibles of at least $2,000. Covered workers in smaller firms (three to 199 workers) are more likely to face such high deductibles, with half of workers in smaller firms facing deductibles of at least $1,000, including 28% facing deductibles of $2,000 or more.

These numbers in part reflect the rise of consumer-driven plans, which are high-deductible plans that include a tax-preferred savings options such as a Health Savings Account (HAS) or Health Reimbursement Arrangement. Over the past two years, more firms have started to offer these plans, and the share of covered workers enrolled in this type of plan has doubled, from 8% in 2009 to 17% in 2011. Plans that can be used with a HSA have lower premiums than other plan types, but must have annual deductibles of at least $1,200 for an individual and $2,400 for a family this year.

The survey finds that 56% of covered workers are in "grandfathered" plans as defined under health reform.  Grandfathered plans are exempted from some Patient Protection and Affordable Care Act (PPACA)  requirements, including covering preventive benefits with no cost sharing and having an external appeals process.

One in four covered workers (23 percent) are in plans that changed their cost-sharing requirements for preventive services as a result of a requirement of the PPACA that non-grandfathered plans provide certain preventive benefits without cost sharing.  In addition, 31% of covered workers are in plans that changed the list of preventive services due to PPACA.

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