Lockton Denver Benefit Group Survey Finds Colorado Employers See Health Insurance Costs Increase Dramatically

The Lockton Denver Benefit Group announced the results of its 13th annual Colorado employer survey regarding health benefit costs and coverage.

According to a release, the findings indicate that the cost of medical coverage for 2014 will increase at much higher than expected rates in Colorado.

The survey revealed that the average Colorado employer received a renewal rate increase on their existing health plan of 10.9 percent. This was before plan changes or other options were considered. This rate is up from last year's low of 7.4 percent and signifies a concern for employers. It is higher than many other sources had predicted elsewhere in the country and ends a two-year trend of increases of less than 10 percent, which had previously become common.

The average increase after plan changes, increases to employee percentage cost share, and/or changing carriers was 6.4 percent, up from 5.3 percent in 2013. It should be noted that this level of cost reduction (from the earlier stated 10.9 percent) has required employers to utilize multiple tactics at once, shifting much of the cost burden to employees. In the context of the report's average merit pay increase of 2.6 percent, this cost of coverage for employees may be difficult to bear.

"These increases come at an especially difficult time for employers who are just starting to see the economy improve. It will also be difficult for employees, many of whom may be tempted to decline coverage, just when the country is seeking to expand it," said Bill Lindsay, president of Lockton Benefit Group in Denver and the author of the survey.

Other notable findings from the survey include:

-Eighty-six percent of employers expect to pass a percentage of their cost increase on to their employees. This is up from 75 percent last year.

-For the fifth year in a row, the impact of health care reform is one of the top concerns of employers (second only to the total cost of care).

-Thirty-eight percent of the employers surveyed offer a health savings account/high deductible health plan. Twenty-two percent of those without a health savings account plan are considering offering one in 2014.

-Employers offering an HMO increased to 30 percent (up from 26 percent last year). It is presumed that this increase reflects both Kaiser's growth and employers' need to obtain the most cost- effective coverage available.

The survey was sent to 667 Colorado employers. Survey respondents were selected based on size, industry, and visibility in the community. The survey was designed to engage a representative sample of Colorado employers to better understand the employee benefit trends in the Colorado market. This is not a scientific sampling.

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