California Employer Health Benefits

Transcription

1 : Rising Costs, Shrinking Coverage March 2015

2 Introduction The percentage of employers offering coverage continues to decline in California, and many covered workers are seeing reduced benefits and increased cost sharing trends with major implications for the household budgets of millions of people. Only 58% of firms reported providing health insurance to employees, down from 69% in The data, compiled from the 2014 Survey, are contained in the CHCF-sponsored report : Rising Costs, Shrinking Coverage. The survey found that four in 10 firms said they expected to increase employees premium contributions in 2015, while 19% said they were likely to raise deductibles. contents Overview... 3 Coverage Availability... 4 Cost of Health Insurance... 9 Benefits and Cost Sharing Key findings include: Larger firms and those with unionized workers were more likely to offer health coverage than smaller firms and those without collective bargaining agreements. The average monthly health plan premium in California was $1,467 for family coverage and $560 for single coverage. These figures include the employer contribution. Plan Choice and Enrollment Employer Views and Practices Methodology California premiums, which include the employer contribution, were 11% higher than the national average for single coverage and 5% higher for family coverage. Historically, health insurance premiums in California have been lower than the national average. Since 2002, health plan premiums in California rose by 189%, outpacing the 33% rise in overall inflation. One in three workers in small firms faced a deductible of at least $1,000 for single coverage compared to 14% of workers at large firms. In 2014, 28% of large firms reduced health benefits or increased cost sharing while only 8% of small firms did so California HealthCare Foundation 2

3 Employers, Workers, and Covered Workers, by Firm Size California vs. United States, 2014 Overview In 2014, California firms with number of workers 3 to 9 10 to to to 999 1, to 49 workers accounted for Employers* 2% 1% 92% of all employers, but just California 61% 31% 6% 27% of all workers and 20% of US 61% 32% 6% <1% 1,000+ workers with health coverage. California Workers 9% 18% 14% 12% 46% 1% US 8% 17% 14% 14% 48% California Covered Workers 6% 14% 14% 13% 53% US 3% 14% 14% 15% 55% *Estimates are statistically different between California and US. Note: Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2014; author analyses of data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits public use file: California HealthCare Foundation 3

4 Employers Offering Coverage California vs. United States, 2000 to % 90% Coverage Availability The percentage of California employers offering health insurance in 2014 (58%) was similar to the 80% 70% 60% 50% 40% 69% 68% 70% 68% 71% 66% 70% 66% 67% 63% 67% 60% 71% 61% 71% 59% 70% 63% 73% 59% 69%* 63%* 69% 61% 60% 61% 61% 57% 58% 55% overall US rate of 55%. The recent decline in California s offer rate is a departure from the decade preceeding 2010 when the offer rate stayed steady at around 70%. 30% California United States 20% 10% 0% *Estimate is statistically different from the previous year shown. Sources: CHCF/NORC Survey: ; CHCF/HSC Survey: ; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: ; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: California HealthCare Foundation 4

5 Employers Offering Coverage, by Firm Characteristics California, 2014 All Firms Many Lower-Wage Workers* 18% Fewer Lower-Wage Workers* 58% 64% Coverage Availability Whether a company offers coverage varies widely by firm characteristics. Firms with 35% or more lower-wage workers were less likely to offer health insurance than those with fewer than 35% Many Part-Time Workers* 46% lower-wage employees. Almost all companies with union workers Fewer Part-Time Workers* At Least Some Union Workers* 61% 99% (99%) offered coverage, while only 57% of those with no union workers did. No Union Workers* 57% *Estimate is statistically different from all other firms. Notes: Many lower-wage workers is defined as 35% or more of workers earning $23,000 or less per year. Fewer lower-wage workers is defined as less than 35% of workers earning that amount. Many part-time workers is defined as 35% or more of the workforce working part time. Fewer part-time workers is the inverse. Source: CHCF/NORC Survey: California HealthCare Foundation 5

6 Employers Offering Coverage, by Firm Size California vs. United States, 2014 Coverage Availability Only half (48%) of California s California United States 87% 91% 98% 98% 100% 100% smallest firms (3 to 9 workers) offered coverage in 2014, while the vast majority of larger firms did so. Offer rates for California firms were 71% 69% comparable to nationwide rates. 58% 55% 48% 44% All Firm Sizes 3 to 9 10 to to to 999 1,000+ Number of Workers Note: Tests found no statistically different estimates between California and US. Sources: CHCF/NORC Survey: 2014; author analyses of data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits public use file: California HealthCare Foundation 6

7 Employee Eligibility, Take-Up Rates, and Coverage California vs. United States, % 77% 64% 62% Eligible Workers Who Take Up Coverage* California United States 85% 80% Coverage Availability Seventy-six percent of people working in California firms offering coverage were eligible for health benefits. Some firms do not cover part-time or temporary workers or have a waiting period for coverage. Of those eligible workers, 85% elected to enroll. Sixty-four percent of all workers received health coverage from their firm. Eligible Workers Covered Workers *Estimates are statistically different between California and US. Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: California HealthCare Foundation 7

8 Worker Coverage Rates Among Firms Offering Health Benefits by Firm Size, California, 2006 to 2014, Selected Years Coverage Availability Insurance coverage rates among All Firms 67% 65% 64% 66% 64% California employers offering health benefits have been fairly stable since 2006, with year to year changes not statistically significant. Small Firms (3 to 199 workers) 69% 69% 67% 63% 62% From 2006 to 2014, however, the coverage rate for small firms decreased significantly. Large Firms (200+ workers) 65% 63% 62% 68% 65% Note: Tests found no statistically different estimates from previous year shown within firm size. Sources: CHCF/NORC Survey: 2008, 2010, 2012, 2014; CHCF/HSC Survey: California HealthCare Foundation 8

9 Average Increase in Premiums, Family Coverage Fixed vs. Variable Enrollment, California vs. United States, 2014 Cost of Health Insurance Among California firms that offered the same health plan or plans in 6.0% 2013 and 2014 (fixed enrollment), the average family coverage premium increase was 6.0%. For California firms that changed plans or had workers who switched plans 3.0% (variable enrollment), the average family premium increase was 1.7%. 1.7% California (Fixed Enrollment) California (Variable Enrollment) United States (Variable Enrollment) Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Survey of Employer-Sponsored Health Benefits: California HealthCare Foundation 9

10 Annual Premium Growth Compared to Inflation Family Coverage, California, 1999 to 2014 Cost of Health Insurance Health insurance premiums for 18% 16% 14% 12% 10% 8% 6% 4% 2% 4.8% 3.5% 6.7% 10.0%* 13.4%* 4.3% 2.8% 15.8%* 8.2%* 11.4%* 3.9% 2.8% 2.7% 1.7% 8.7% 8.3% 7.5% 8.1% 4.2% Premiums Overall Inflation 6.4%* 6.0% 5.7% 3.4% 3.0% 3.1% 1.8% 1.7% 1.4% 2.2% family coverage in California grew by 6% in 2014, similar to the rate of increase in Premiums continued to rise much faster than the California inflation rate. 0% 2% % *Estimates are statistically different from the previous year shown. Sources: CHCF/NORC Survey: ; CHCF/HSC Survey: ; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: ; California Division of Labor Statistics and Research, Consumer Price Index, California Average of Annual Inflation (April to April) California HealthCare Foundation 10

11 Cumulative Premium Growth Compared to Inflation Family Coverage, California, 2002 to 2014 Cost of Health Insurance Since 2002, health insurance 220% 200% 180% Premiums Overall Inflation 202.2% premiums in California have increased by 202%, more than five times the 36% increase in 160% the state s overall inflation rate. 140% 120% 100% 80% 60% 40% 13.4% 36.1% 20% 2.8% 0% Sources: CHCF/NORC Survey: ; CHCF/HSC Survey: ; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: ; California Division of Labor Statistics and Research, Consumer Price Index, California Average of Annual Inflation (April to April) California HealthCare Foundation 11

12 Average Monthly Premium, by Plan Type California vs. United States, 2014 All Plans* HMO PPO* POS HDHP/SO Single Coverage $560 $502 $526 c $519 $659 $518 $531 $514 $472 $442 California United States Cost of Health Insurance Average monthly premiums for single and family coverage were significantly greater in California than nationally. All Plans* HMO PPO* POS HDHP/SO Family Coverage $1,467 $1,403 $1,406 $1,449 $1,444 $1,278 $1,336 $1,341 $1,283 $1,674 *Estimates are statistically different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Employer Health Benefits Survey: California HealthCare Foundation 12

13 Average Monthly HMO Premiums, Single Coverage California vs. United States, 2000 to 2014 Cost of Health Insurance For a decade starting in 2000, $600 $555 California s average monthly HMO $500 $400 $300 $200 $199 $187 $163 $178 $233 $196 $263 California United States $222 $288 $261 $314 $282 $342 $337 $358 $330 $396 $374 $406 $395 $428 $474 $422 $446 $520 $472 $502 $526 $519 premium for single coverage stayed below that of the US, but surpassed the national rate in In 2014, California s monthly HMO premium was not significantly different from the national figure. $ * 2001* 2002* 2003* 2004* 2005* * 2008* * 2012* *Estimates are statistically different between California and US. Notes: Annual rate of change for HMO single premiums should not be calculated by comparing premiums from one year to the next, due to both the survey s sampling design and the way in which plan information is collected. Rates of change in family premiums are collected directly as a question in the survey (no change data for single premiums are collected). Sources: CHCF/NORC Survey: ; CHCF/HSC Survey: ; CHCF/HRET California Employer Health Benefits Survey: 2004; Kaiser/HRET Survey: ; Kaiser/HRET Employer Health Benefits Survey: California HealthCare Foundation 13

14 Annual Worker and Employer Premium Contributions California vs. United States, 2014 Cost of Health Insurance California workers contributed an Worker Contribution Employer Contribution average of $1,048 annually for CA US CA Single Coverage $1,048 $5,666* $6,714* $1,081 $4,944* $6,025* Family Coverage $4,499 $13,109* $17,608* single coverage and $4,499 for family coverage in Annual premiums were higher in California than the US for both types of coverage. US $4,823 $12,011* $16,834* *Estimates are statistically different between California and US within coverage type. Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Employer Health Benefits Survey: California HealthCare Foundation 14

15 Worker Share of Premium, by Firm Size California, 2014 No Contribution 1% to 25% 26% to 50% 51%+ Cost of Health Insurance In 2014, 12% of covered California employees worked for firms that All Firms Small Firms* (3 to 199 workers) Single Coverage 12% 65% 19% 3% 14% 45% 33% 8% paid the full premium for single coverage. Employees of small firms were much more likely (29%) to pay more than half of the premium Large Firms* (200+ workers) 11% 76% 12% 1% for family coverage than employees of large firms (6%). Family Coverage All Firms 6% 49% 32% 14% Small Firms* (3 to 199 workers) 6% 22% 43% 29% Large Firms* (200+ workers) 6% 62% 26% 6% *Difference is statistically different between small and large firms. Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 15

16 Worker Share of Premium, Single and Family Coverage California, 2009 to % Cost of Health Insurance California workers paid an average of 17% of the total premium 35% Single Coverage Family Coverage for single coverage and 26% for family coverage in The 30% 33%* corresponding annual premium 25% 20% 27% 27% 25% 26% 22%* 26%* contributions were $1,048 and $4,499 for single and family, respectively. The percentage of 15% 10% 12% 15% 13% 16% 17%* premiums paid by workers has remained steady over time, with the one-time increase in % appearing to be an anomaly. 0% *Estimates are statistically different from previous year shown. Source: CHCF/NORC Survey: California HealthCare Foundation 16

17 Workers with Office Visit Copayments, by Plan Type California, 2008 to 2014, Selected Years per visit copay * HMO $5 $10 $15 $20 $25 $30 Other 4% 23% 36% 25% 6% 5% 1% 20% 28% 30% 11% 8% 2% 23% 24% 30% 10% 8% 4% 1% 5% 20% 46% 10% 10% 9% 1% Benefits and Cost Sharing Copayments for office visits increased for all types of plans between 2008 and 2014, with $20 as the most common amount across all plan types * PPO (in-network) 17% 25% 30% 11% 7% 10% 10% 24% 35% 15% 11% 5% 13% 10% 37% 21% 12% 8% 22% 11% 34% 14% 9% 10% * POS (in-network) 5% 32% 15% 27% 8% 6% 6% 1% 16% 6% 36% 10% 15% 16% 2% 15% 36% 9% 23% 15% 3% 17% 33% 12% 26% 9% *Distribution is statistically different from previous year shown. Notes: POS means point-of-service plan. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: 2008, 2010, 2012, California HealthCare Foundation 17

18 Workers with Annual Deductible, Single Coverage by Plan Type, California vs. United States, 2014 Benefits and Cost Sharing PPO members in California and California United States $2,224 $2,215 nationwide were much more likely $1,215 70% $667 74% $843 85% 100% 100% to have an annual deductible than workers in HMOs or in POS plans. The average annual deductible for PPO single coverage in California was $667, less than the US average $1,032 37% $1,290 33% of $843. $1,231 14% HMO* POS In-Network* PPO In-Network HDHP/SO *Percentages are statistically different between California and US. Average deductibles are statistically different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Employer Health Benefits Survey: California HealthCare Foundation 18

19 Workers with Large Deductible ($1,000+), Single Coverage by Firm Size, California, 2006 to 2014 Benefits and Cost Sharing About one-third (32%) of workers 35% 30% All Firms Small Firms (3 to 199 workers) Large Firms (200+ workers) 27% 27% 26% 32% 32% in small firms had an annual deductible of $1,000 or more for single coverage in 2014, up from 25% 21% in A smaller percentage 21%* 20% of workers in large firms (14%) had 20% 17% a deductible of $1,000 or more. 15% 14% 12% 14% 13% 14% 14% 10% 5% 7% 6% 5% 11% 10% 10% 9% 5% 6% 5% 5% 8% 9% 0% *Estimate is statistically different from previous year shown within firm size. Note: Data for PPO and POS plans are for in-network use only. Sources: CHCF/NORC Survey: ; CHCF/HSC Survey: California HealthCare Foundation 19

20 Deductibles for Single Coverage, by Plan Type California, 2014 <$500 $500 to $999 $1,000 to $1,999 $2,000+ Benefits and Cost Sharing Among California workers with a deductible for single coverage, (% that has a deductible) All Plans (35%) 29% 19% 22% 30% more than half had a deductible of $1,000 or more. HMO (14%) 27% 10% 31% 31% PPO* (in-network) (74%) 50% 30% 14% 6% POS (in-network) (33%) 6% 32% 46% 16% HDHP/SO* (100%) 33% 67% *Distribution is statistically different from All Plans. Notes: The data are based on workers with a deductible. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 20

21 Deductibles for Single PPO Coverage California vs. United States, 2006 to 2014, Selected Years <$500 $500 to $999 $1,000 to $1,999 $2,000+ Benefits and Cost Sharing Since 2006, California workers have been faced with increasing California 69% 21% 8% 2% 63% 26% 8% 4% 66% 23% 7% 4% 56% 28% 5% 10% deductibles for PPO coverage. In 2014, 20% of workers in PPO plans with a deductible had one of $1,000 or more. 2014* 50% 30% 14% 6% United States % 26% 8% 4% 2008* 2010* % 30% 13% 4% 49% 29% 16% 6% 42% 33% 18% 8% 33% 36% 21% 10% *Distribution is statistically different from previous year shown. Notes: Includes in-network use only. Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2008, 2010, 2012, 2014; CHCF/HSC Survey: 2006; author analyses of data from Kaiser/HRET Employer Health Benefits Survey public use files: 2006, 2008, 2010, 2012, California HealthCare Foundation 21

22 Deductibles for Family Coverage, by Plan Type California, 2014 (% that has a deductible) All Plans (35%) <$500 $500 to $999 $1,000 to $1,999 $2, % 18% 12% 58% Benefits and Cost Sharing Among California workers with an aggregate family deductible, nearly 6 in 10 had an annual deductible of $2,000 or more. HMO (14%) 25% 7% 2% 66% PPO* (in-network) (75%) 9% 41% 29% 21% POS (in-network) (33%) 14% 33% 52% HDHP/SO (100%) 100% *Distribution is statistically different from All Plans. Notes: The data are based on workers with a deductible. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $2,000 for family coverage. No test was done comparing HDHP/SO with All Plans. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 22

23 Annual Out-of-Pocket Limits, Single Coverage by Plan Type, California, 2014 <$1,000 $1,000 to $1,499 $1,500 to $1,999 $2,000 to $2,499 $2,500 to $2,999 $3,000+ No Limit All Plans 14% 34% 8% 3% 28% 11% Benefits and Cost Sharing Out-of-pocket limits, set up by plans to help curb costs for consumers, can vary greatly. While the large majority of covered HMO PPO (in-network) 1% 1% 9% 48% 9% 2% 19% 12% 5% 20% 14% 12% 7% 32% 10% workers (89%) with single coverage had an annual out-of-pocket limit, for 28%, that limit was $3,000 or more, and 11% had no limit. POS (in-network) HDHP/SO* 4% 15% 24% 6% 35% 15% 1% 2% 7% 88% 1% *Distribution is statistically different from All Plans. Notes: Since HMOs typically provide very comprehensive coverage, not having a limit on out-of-pocket expenditures does not expose enrollees to the same financial risk as it could in other plan types. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 23

24 Annual Out-of-Pocket Limits, Family Coverage by Plan Type, California, 2014 <$2,000 $2,000 to $2,999 $3,000 to $3,999 $4,000 to $4,999 $5,000 to $5,999 $6,000+ No Limit All Plans 24% 5% 30% 5% 3% 22% 11% Benefits and Cost Sharing Only 24% of covered California workers with family coverage had an annual aggregate out-of-pocket limit of less than $2,000, while HMO PPO (in-network) 27% 5% 32% 6% 2% 16% 12% 27% 6% 17% 15% 5% 21% 10% 22% had a limit of $6,000 or more. Eleven percent of covered workers had no out-of-pocket limit. POS (in-network) 26% 10% 20% 3% 5% 19% 17% HDHP/SO* 4% 5%3% 7% 80% 1% *Distribution is statistically different from All Plans. Notes: Since HMOs typically provide very comprehensive coverage, not having a limit on out-of-pocket expenditures does not expose enrollees to the same financial risk as it could in other plan types. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $2,000 for family coverage. Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 24

25 Annual Out-of-Pocket Limits, Single PPO Coverage California, 2006 to 2014, Selected Years <$1,000 $1,000 to $1,499 $1,500 to $1,999 $2,000 to $2,499 $2,500 to $2,999 $3,000+ No Limit Benefits and Cost Sharing The proportion of California workers in PPOs with an out-of-pocket limit of $3,000 or more for single % 12% 16% 17% 9% 21% 16% coverage increased from 21% in 2006 to 32% in * 9% 23% 15% 16% 9% 21% 8% 2010* 3% 17% 11% 19% 12% 28% 11% % 15% 11% 20% 9% 30% 9% % 20% 14% 12% 7% 32% 10% *Distribution is statistically different from previous year shown. Notes: Includes in-network use only. Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2008, 2010, 2012, 2014; CHCF/HSC Survey: California HealthCare Foundation 25

26 Workers Cost Sharing for Prescriptions California vs. United States, 2006 to 2014, Selected Years * California One Tier Two Tier Three Tier Four Tier Other 1% 56% 30% 10% 2% 55% 32% 9% 3% 59% 27% 8% 4% 4% 50% 37% 7% 15% 42% 36% 5% United States % 69% 16% 8% 2% 2% 1% 2% 2% Benefits and Cost Sharing Employers are increasingly moving towards health plans with three- and four-tier coverage for prescription drugs. Consumers with four-tier cost sharing coverage are exposed to the greatest amount of financial risk. In 2014, 5% of covered workers, in California and nationally, were in these highest 2008* 2010* % 70% 15% 4% 4% 13% 65% 11% 5% 5% 14% 63% 10% 6% 5% 20% 60% 10% 5% 5% tier plans. *Distribution is statistically different from previous year shown. Notes: One tier is the same cost share regardless of drug type. Two tier is one payment for generic drugs and one for name brand. Three tier is one payment for generic drugs, another for preferred drugs, and a third for non-preferred drugs. Four tier is three-tier cost sharing plus a fourth tier for lifestyle or other specified drugs. Other includes no cost sharing. Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2008, 2010, 2012, 2014; CHCF/HSC Survey: 2006; author analysis of data from the Kaiser/HRET Survey of Employer-Sponsored Health Benefits public use file: 2006, 2008, 2010, 2012, California HealthCare Foundation 26

27 Average Prescription Copayments, by Drug Type California, 2006 to 2014, Selected Years Benefits and Cost Sharing Average copayments for generic Generic Drugs $10.28 $10.49* $10.58 $9.79 $12.11 Preferred Drugs $21.24 $23.34 $24.99 $25.80 $ drugs are less than half what they are for preferred drugs, and almost one-fourth what they are for nonpreferred drugs. Copayments for all drugs increased between 2006 and Nonpreferred Drugs $38.09 $41.05 $42.31 $47.62* $45.67 *Estimate is statistically different from previous year shown. Notes: Preferred drugs are those listed in a plan s formulary. Nonpreferred drugs are those that are not listed in the formulary. Sources: CHCF/NORC Survey: 2008, 2010, 2012, 2014; CHCF/HSC Survey: California HealthCare Foundation 27

28 Plan Options Available to Covered Workers, by Type California vs. United States, 2014 Plan Choice and Enrollment Eighty percent of covered California California United States workers had an HMO option in 74% 77% 80% 2014, compared to only 31% of covered workers nationally. California workers were less likely than workers nationally to have 45% an HDHP/SO option. 31% 21% <1% 3% 12% 13% Conventional* POS HDHP/SO* PPO HMO* *Estimates are statistically different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Employer Health Benefits Survey: California HealthCare Foundation 28

29 Enrollment of Covered Workers, by Plan Type California vs. United States, 2006 to 2014, Selected Years * * 2010* 2012* 2014 California Conventional HMO PPO POS HDHP/SO 1% 50% 34% 14% 52% 33% 11% 4% 1% 49% 36% 8% 6% United States 55% 33% 7% 5% 54% 29% 8% 10% % 20% 60% 13% 4% 2% 20% 58% 12% 8% 1% 19% 58% 8% 13% <1% 16% 56% 9% 19% <1% 13% 58% 8% 20% 2% Plan Choice and Enrollment California workers have been consistently more likely to enroll in HMOs than covered workers nationally. Enrollment by California workers in PPO and high-deductible plans continued to lag US rates. *Distribution is statistically different from previous year shown. Notes: POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Values may not add to 100% due to rounding. Sources: CHCF/NORC Survey: 2008, 2010, 2012, 2014; CHCF/HSC Survey: 2006; author analyses of data from Kaiser/HRET Employer Health Benefits Survey public use files: 2006, 2008, 2010, 2012, California HealthCare Foundation 29

30 Firms Offering a High-Deductible Health Plan, by Firm Size California, 2014 Plan Choice and Enrollment Sixty-five percent of all California 65% 65% 60% All Firms Small Firms Large Firms (3 to 199 workers) (200+ workers) 51% firms offered a high-deductible health plan (HDHP) in Of these firms, 11% offered a HDHP with a health reimbursement agreement, while 33% offered an HDHP with a health savings 33% 33% account. HDHPs expose workers to higher out-of-pocket costs than other plan types. 11% 11% 12% HDHP HDHP (HRA-Eligible) HDHP (HSA-Eligible) Notes: Tests found no statistically different estimates between small firms and large firms. HDHPs (high-deductible health plans) have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. HRAs (health reimbursement arrangements) are employer-sponsored accounts that provide financial assistance for out-of-pocket health care expenses. and HSAs (health savings accounts) allow employers or employees (and their families) to contribute to a tax-advantaged account, which can be used to provide financial assistance for IRS-approved health care expenses. Source: CHCF/NORC Survey: California HealthCare Foundation 30

31 Employees in Self-Insured Plans, by Plan Type California vs. United States, 2014 Plan Choice and Enrollment Thirty percent of Californians were California United States enrolled in a partly or completely self-insured plan in 2014, compared 71% with 61% nationally. The gap 61% 59% 60% between the state and national figures is associated with California s 48% high HMO enrollment, since HMOs are less likely than other plans to be 30% 32% self-insured. 15% 17% 22% All Plans* HMO* PPO POS HDHP/SO *Estimate is statistically different between California and US. Notes: Self-insured plans are plans for which an employer assumes some or most responsibility for paying health care claims rather than buying coverage from an insurer. POS means point-of-service plan. HDHP/SO means high-deductible health plan with savings option (deductible of at least $1,000 for single coverage, at least $2,000 for family coverage). Sources: CHCF/NORC Survey: 2014; Kaiser/HRET Employer Health Benefits Survey: California HealthCare Foundation 31

32 Likelihood of Firms Making Changes in the Next Year by Type of Change, California, 2014 Very Somewhat Not Too Not at All Don t Know Increase the Amount Employees Pay for Premiums 20% 21% 9% 48% Increase the Amount Employees Pay for Deductibles 6% 13% 21% 55% 5% Increase the Amount Employees Pay for Coinsurance or Copays 8% 10% 22% 54% 5% Increase the Amount Employees Pay for Prescription Drugs 7% 12% 22% 54% 5% Restrict Employee Eligibility for Coverage 2% 1% 5% 92% 2% Employer Views and Practices Forty-one percent of California employers reported they are very likely or somewhat likely to increase the amount that workers pay for premiums in the next year, while 19% stated they are very or somewhat likely to increase employees deductibles and the amount employees pay for prescriptions. Drop Coverage Entirely 1% 6% 6% 88% Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 32

33 Likelihood of Firms Making Selected Changes in the Next Year by Firm Size, California, 2014 Very Somewhat Not Too Not at All Don t Know Employer Views and Practices Fifty-seven percent of large employers in California reported Small Firm* (1 to 199 workers) Employee Premium Contribution Increases 19% 21% 9% 49% 2% that they are very likely or somewhat likely to increase the amount employees pay for health Large Firm* (200+ workers) 34% 23% 18% 24% 1% insurance premiums in the coming year, versus 40% of small firms. Small Firm (1 to 199 workers) Coinsurance or Copay Increases 8% 10% 22% 55% 5% Large Firm (200+ workers) 8% 14% 26% 50% 2% *Difference is statistically different between small and large firms. Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 33

34 Firms That Made Selected Changes in the Past Year by Firm Size and Region, California, 2013 vs Reduced Scope of Health Benefits or Increased Cost Sharing All Firms 24% 9% Firm Size Small Firms (3 to 199 workers) 24% 8%* Large Firms (200+ workers) 31% 28%* 200 to 999 workers 27% 30%* 1,000+ workers 36% 25%* Region Los Angeles 28% 9% Employer Views and Practices In 2014, 9% of California firms increased cost sharing for workers or reduced the scope of their health benefits in the past year, with a greater percentage of large firms than small firms doing so. In 2013, a much larger percentage of California employers reported such changes: 24%. San Francisco 15% 8% Rest of State 24% 11% *Estimates are statistically different from All Firms. Note: Los Angeles and San Francisco are defined as the metropolitan statistical area (MSA). Source: CHCF/NORC Survey: 2013 and California HealthCare Foundation 34

35 Difficulty of Shopping, by Comparison Criteria Small Firms (<200 workers), California, 2014 Benefits Premium Costs Very Somewhat Not Too Not at All Don t Know 15% 25% 13% 37% 9% 10% 28% 15% 41% 6% Employer Views and Practices Fifty-six percent of smaller firms currently offering benefits reported that comparing plan quality while shopping for health insurance plans was very or somewhat difficult. In contrast, at least 50% of these firms found that comparing benefits or premium costs was not too or not at all difficult. Quality 24% 32% 9% 30% 5% 2 1 5% 92% Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 35

36 Familiarity with SHOP Exchanges, by Firm Size Smallest Firms (<50 workers), California, 2014 Very Somewhat Not Too Not at All Employer Views and Practices Established under the Affordable Care Act, the Small Business All Smallest Firms 3 to 9 Workers 10 to 24 Workers 25 to 49 Workers 7% 30% 17% 46% 6% 26% 16% 52% 11% 32% 21% 35% 3% 53% 7% 38% Health Options Program (SHOP) exchanges are the online insurance marketplaces for smaller companies. Most small firms reported that they were unfamiliar with the SHOP exchanges that opened in October Sixty-three percent of employers with fewer than 50 workers reported being not too familiar or not at all familiar with SHOP. Note: Values may not add to 100% due to rounding. Source: CHCF/NORC Survey: California HealthCare Foundation 36

37 Firms Asking Employees to Complete a Health Risk Appraisal by Firm Size, California, 2014 Employer Views and Practices Twenty-five percent of California percentage of firms asking for an appraisal 25% 24% 42% All Firms Small Firms (3 to 199 workers)* Large Firms (200+ workers)* firms that offer health benefits invited workers to complete a health risk appraisal or assessment, with large firms being significantly more likely to do so than small firms. Of firms asking for an appraisal, percentage that offered financial incentive to do so 32% 31% 52% *Estimate is statistically different between small firms and large firms. Source: CHCF/NORC Survey: California HealthCare Foundation 37

38 Firms Offering Wellness Benefits, by Firm Size, California, 2014 Employer Views and Practices Gym Membership Discount for On-Site Facilities 33% 32% Weight Loss Program Biometric Screening Smoking Cessation Program Classes in Nutrition or Healthy Living Personal Health Coaching 30% 29% 35% 34% 41% 40% 42% 42% 47% 46% 54% 59% 58% 63% 66% 67% All Firms Small Firms* (3 to 199 workers) Large Firms* (200+ workers) Some wellness benefits were common among California employers in 2014, such as webbased resources for healthy living (61% of firms) and wellness newsletters (55% of firms). Large firms were more likely to offer wellness benefits than smaller firms. Wellness Newsletter 55% 55% 64% Web-Based Resources for Healthy Living 61% 60% 77% *Estimates are statistically different between small firms and large firms. Source: CHCF/NORC Survey: California HealthCare Foundation 38

39 Methodology The Survey is a joint product of the California HealthCare Foundation (CHCF) and NORC. The survey was designed and analyzed by researchers at NORC and administered by National Research LLC (NR). The findings are based on a random sample of 801 interviews with employee benefit managers in private firms in California. NR conducted interviews from May to September As with prior years, the sample of firms was drawn from the Dun & Bradstreet list of private employers with three or more workers. The margin of error for responses among all employers is +/ 3.8%; for responses among employers with 3 to 199 workers, it is +/ 5.0%; and among employers with 200+ workers, it is +/ 5.9%. The Kaiser Family Foundation (KFF) sponsored this survey of California employers from 2000 to A similar employer survey was also conducted in 1999 in California, in conjunction with the Center for Health and Public Policy Studies at the University of California, Berkeley. The Health Research and Educational Trust (HRET) collaborated on these surveys from 1999 to The Center for Studying Health System Change collaborated on these surveys from 2005 to This survey instrument is similar to a national employer survey conducted annually by KFF and HRET. The US results in this study are either from the published reports, or in a few cases, from author calculations from the survey s public-use files. A full analysis of the US dataset is available on the Kaiser Foundation s website at Both the California and US surveys asked questions about health maintenance organizations (HMOs), preferred provider organizations (PPOs), point-of-service (POS) plans, and high-deductible health plans with a savings option (HDHPs/SO). Cost sharing data for PPO and POS plans are for in-network use only. Conventional (fee-for-service) plans are generally excluded from the plan type analyses because they comprise such a small share of the California market. Many variables with missing information were identified as needing complete information within the database. To control for item nonresponse bias, missing values within these variables were imputed using a hot-deck approach. Calculation of the weights follows a common approach. First, the basic weight is determined, followed by a survey nonresponse adjustment. Next, the weights are trimmed in order to reduce the influence of weight outliers. Finally, a post-stratification adjustment is applied. All statistical tests in this chart pack compare either changes over time, a plan-specific estimate with an overall estimate, or subcategories versus all other firms (e.g., firms with 3 to 9 workers vs. all other firms). Tests include t-tests and chi-square tests, and significance was determined at p<0.05 level. Due to the complex nature of the design, standard errors are calculated in SUDAAN. An important note about the methodology: Rates of change for total premiums, for worker or employer contributions to premiums, and other variables calculated by comparing dollar values in this report to data reported in past CHCF or KFF publications should be used with caution, due to both the survey s sampling design and the way in which plan information is collected. Rates calculated in this fashion not only reflect a change in the dollar values but also a change in enrollment distribution, thus creating a variable enrollment estimate. However, rates of change in premiums are collected directly as a question in the California survey. This rate of change holds enrollment constant between the current year and the previous year, thus creating a fixed enrollment estimate. Because the survey does not collect information on the rate of change in other variables, additional rates are not reported. The national survey conducted by Kaiser/HRET, however, stopped directly collecting rates of change in premiums in its 2008 survey. Therefore, the rate of change in total premiums in the US provided in this report uses a variable enrollment estimate. Please note that due to a change in the post-stratification methods applied in 2003, the survey data published in this chart book may vary slightly from reports published prior to about this series The California Health Care Almanac is an online clearinghouse for data and analysis examining the state s health care system. It focuses on issues of quality, affordability, insurance coverage and the uninsured, and the financial health of the system with the goal of supporting thoughtful planning and effective decisionmaking. Learn more at for more information California HealthCare Foundation 1438 Webster Street, Suite 400 Oakland, CA NORC at the University of Chicago 4350 East West Highway Suite 800 Bethesda, MD California HealthCare Foundation 39