Report: Employers’ Health Plan Costs Actually Dropped This Year

UBA survey finds average annual health plan cost dipped to $9,727 from $9,736 in 2015.

It’s only $9, but it explains a lot about why most employers aren’t rushing to dramatically change their health plan options for their employees. Tinkering with worker benefits will do just fine.

The average annual health plan cost per employee for all health plan types was $9,727 this year, according to the just-released 2016 Health Plan Survey from United Benefit Advisors, the Indianapolis-based employee benefits consulting firm. That’s down slightly from $9,736 in 2015.

The UBA attributed the result to a number of factors, including increased enrollment of employees in lower-priced, high-deductible health plans and HMOs, higher out-of-network deductibles and out-of-pocket maximums for employees and reduced prescription drug coverage.

The UBA’s annual survey is based on information from 19,557 health plans offered to employees by 11,524 employers in 2016.

Of the five most-common health plan types, three saw their cost rise while two saw their cost drop this year:

  • The average annual total cost of a point-of-service, or POS, plan rose 5.2 percent to $10,248
  • The average annual total cost of a preferred provider organization, or PPO, plan rose 4 percent to $10,134
  • The average annual total cost of a high-deductible health plan, or HDHP, rose 2 percent to $9,391
  • The average annual total cost of an exclusive provider organization, or EPO, health plan dropped 6 percent to $10,141
  • The average annual total cost of an HMO health plan dropped 6 percent to $8,886

In the Central region of the U.S., which includes Minnesota, the most-prevalent health plan type was a PPO, offered by 60.2 percent of employers this year. That was followed by HDHPs (21 percent); POS plans (8.1 percent); HMOs (7.6 percent); and EPO plans (2.8 percent).

The average annual health plan cost per employee in the Central region was $8,411 this year, or nearly 14 percent less than the national average.