PEOPLE: HR Corner As Economic Outlook Brightens, Health Care Premiums Increase for 2015 By Staff Wednesday, January 14, 2015 10:31 AM NEW YORK—U.S. companies saw a relatively modest uptick in health plan costs in 2014, but premiums will see a sharper increase this year, according to new research released in November 2014 by Aon Hewitt. For 2015, the average health care premium adjustment for midsize and large U.S. companies will be 5.5 percent after plan design changes and vendor negotiations aimed at curtailing costs, up from 4.4 percent in 2014. “Over the past few years, the overall economic situation kept consumer spending on discretionary items, including health care, down, and we observed a lower rate of premium increases,” said Tim Nimmer, chief health care actuary at Aon Hewitt, in a statement about the report’s findings. “Now, with employment rates stabilizing, individuals are feeling more secure about their financial situation and have been willing to re-engage in using the health care system. As these utilization rates increase, we expect to see health care cost increases follow.” For 2015, the data from midsize and large employers also reveal that: • Average health care costs are projected to increase to $11,304 per employee, up from $10,717 in 2014 and $10,266 in 2013. • Employees will be asked to contribute 23.6 percent of the total health care premium, which equates to $2,664. The portion of the total health care premium that employees were asked to contribute in 2014 was $2,487, up from $2,355 in 2013. • Average employee out-of-pocket costs, resulting from co-payments, co-insurance and deductibles, are expected to hit $2,487, up from $2,295 in 2014 and $2,005 in 2013. These projections show that over the last five years, employees’ share of health care costs, including premium contributions and out-of-pocket costs, will have increased more than 52 percent, from $3,389 in 2010 to $5,151 in 2015. Smaller employer group insurance plans can expect similar or greater increases for 2015. The tables below show average plan premium costs over the past five years for health maintenance organizations (HMOs), point of service (POS) plans, and preferred provider organizations (PPOs), along with national averages for all plan types. Hedley Lawson Contributing Editor Managing Partner Aligned Growth Partners, LLC (707) 217-0979 hlawson@alignedgrowth.com www.alignedgrowth.com