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.
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.
- 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.
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.
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.
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%).
*Modified from a USA Today article