california Health Care Almanac California Employer Health Benefits Survey december 2011 California Employer Health Benefits overview Introduction << return to Contents employer-based coverage is the leading source of health insurance in California and nationally. Changes in coverage contents offerings, worker cost sharing, and benefits have major implications for millions of Californians. this report presents the overview .................................3 highlights of the 2011 California Employer Health Benefits Survey, annual research that tracks changes in employer-based Coverage availability .....................4 health benefits in the state over time. Cost of Health insurance ..................9 Key findings include: Benefits and Cost sharing .............. 16 • since 2002, premiums rose 153.5%, more than five times the 29.3% increase in California’s inflation rate. Plan enrollment and Choice ............ 27 • the proportion of California employers offering coverage declined from 73% to 63% over the last two years. employer Views and Practices .......... 31 • Premiums were higher in California than nationally for both single and family coverage. However, the employer contribution in California was significantly higher than the national average. Methodology ........................... 41 • annual premiums for single coverage in California were $5,970, compared to $5,429 nationally. family coverage premiums were $15,724 in California and $15,073 nationally. • employers in California contributed $5,213 annually for single coverage and $11,921 for family coverage. • Workers in small firms in California were significantly more likely to cover at least half of the premium for family coverage than workers in large firms. • enrollment in plans with a deductible of $1,000 or more for single coverage leveled off for California workers in 2011, but has increased considerably in recent years for small firms. twenty-seven percent of workers in small firms have a deductible of $1,000 or more, up from just 7% in 2006. • twenty-five percent of California firms either reduced benefits or increased cost sharing for employees in the past year, while 22% increased employees’ share of the premium (compared to 15% in 2010). • thirty-six percent of California firms say they are “very” or “somewhat” likely to increase the amount workers pay for premiums in the coming year. additional information on the project methodology is available at the end of the presentation on page 41. 2 ©2011 California HealtHCare foundation California Employer Health Benefits overview Employers, Workers, and Covered Workers, << return to contents by Firm Size, California vs. the United States, 2011* california firms with three number of worKers to 49 workers accounted for  3 to 9  10 to 49  50 to 199  200 to 999  1,000+ 91% of employers but just Employers 2%1% 27% of all workers and 21% California 60% 31% 6% of covered workers. 61% 32% 6% US <1% Workers 9% 18% 15% 13% 45% California 8% 17% 14% 14% 48% US Covered Workers California 5% 16% 14% 13% 51% 5% 13% 14% 15% 53% US *tests found no statistically different distributions between california and the united states. note: in this report, numbers may not add up to 100% due to rounding. sources: california Healthcare foundation/norc california employer Health benefits survey: 2011. author analysis of data from the Kaiser/Hret survey of employer-sponsored Health benefits: 2011. 3 ©2011 california HealtHcare foundation California Employer Health Benefits coverage availability Employers Offering Coverage, << return to contents California vs. the United States, 2000 – 2011 the offer rate for employers declined significantly from 100% 73% to 63% over the last 90% two years. this is a departure 80% from previous years and 73% 69% 70% 71% 70% 71% 71% 70% 69% 67% 67% could be an early sign of 70% 63% California 68% 68% 69% future changes. 66% 66% 60% 63% 63% 60% 61% 59% 59% 60% United States 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011* *us estimates are statistically different from the previous year shown. sources: california Healthcare foundation (cHcf)/norc california employer Health benefits survey: 2007– 2011. cHcf/Hsc california employer Health benefits survey: 2005 – 2006. cHcf/Hret california employer Health benefits survey: 2004. Kaiser/Hret california employer Health benefits survey: 2000 – 2003. Kaiser/Hret survey of employer-sponsored Health benefits: 2000 – 2011. 4 ©2011 california HealtHcare foundation California Employer Health Benefits Coverage availability Employers Offering Coverage, << return to Contents by Firm Characteristics, California, 2011 the probability of employers offering All Firms 63% coverage varied widely by firm characteristics. Lower-Wage Firms* 42% only 42% of lower-wage Higher-Wage Firms* firms offered health benefits 66% in 2011, versus 66% of Many Part-Time Workers* higher-wage ones. 41% Fewer Part-Time Workers* 70% At Least Some Union Workers 84% No Union Workers 61% 0 17 34 51 68 85 *estimates are statistically different between lower- and higher-wage firms, and between many and fewer part-time workers. notes: lower-Wage firms are defined as those in which at least 35% of workers earn $23,000 or less per year. Higher-Wage firms are those in which less than 35% of workers earn $23,000 or less. Many Part-time Workers are firms in which at least 35% of workers work part-time. fewer Part-time Workers are first in which less than 35% work part-time. source: California HealthCare foundation/norC California employer Health Benefits survey: 2011. 5 ©2011 California HealtHCare foundation California Employer Health Benefits coverage availability Employers Offering Coverage, << return to contents by Firm Size, California vs. the United States, 2011* slightly more than half of california’s smaller firms  California  United States (three to nine workers) 100 99% 99% 98% 98% provided coverage in 2011, 93% 91% while the vast majority 80 of larger firms did so. 74% 74% offer rates were generally 60 63% comparable in california 60% and the nation. 53% 48% 40 20 0 All Firms 3 to 9 10 to 49 50 to 199 200 to 999 1,000+ Number of Workers *tests found no statistically different estimates between california and the united states. sources: california Healthcare foundation/norc california employer Health benefits survey: 2011. author analysis of data from the Kaiser/Hret survey of employer-sponsored Health benefits: 2011. 6 ©2011 california HealtHcare foundation California Employer Health Benefits coverage availability Employee Eligibility, Take-Up Rates, and Coverage, << return to contents California vs. the United States, 2011 nearly 80% of california employees working in firms  California  United States 100 offering coverage were eligible for health benefits, and 85% of those elected 80 85% to enroll. overall 67% of 81% 79% 79% all employees received 60 67% coverage from their firm. 65% 40 20 0 Employees Who Are Eligible Eligible Employees Employees Covered Who Take Up Coverage* *estimates are statistically different between california and the united states. sources: california Healthcare foundation/norc california employer Health benefits survey: 2011. Kaiser/Hret survey of employer-sponsored Health benefits: 2011. 7 ©2011 california HealtHcare foundation California Employer Health Benefits coverage availability Worker Coverage Rates, Among Offering Firms, << return to contents by Firm Size, California, 2003–2011, Selected Years* insurance coverage rates  2003 have been fairly stable All Firms  2005 69%  2007 since 2003. 65%  2009 66%  2011 65% 67% Small Firms (3 to 199 workers) 73% 73% 71% 67% 66% Large Firms (200+ workers) 66% 60% 63% 64% 67% 0 10 20 30 40 50 60 70 80 *tests found no statistically different estimates from previous year shown within firm size. sources: california Healthcare foundation (cHcf)/norc california employer Health benefits survey: 2007, 2009, and 2011. cHcf/Hsc california employer Health benefits survey: 2005. Kaiser/Hret california employer Health benefits survey: 2003. 8 ©2011 california HealtHcare foundation California Employer Health Benefits cost of Health insurance Average Increases in Premiums, Family Coverage, << return to contents by Product Enrollment Status, California vs. the United States, 2011 among california firms that offered the same health 10 plan or plans in 2010 and 2011 (fixed enrollment), the 9.5% 8 average family coverage 9.1% premium increase for those 8.1% plans was 8.1%. 6 When the calculation includes california firms 4 that changed plans or had workers who switched plans 2 (variable enrollment), the average family premium increase was 9.1%. 0 California California United States (fixed enrollment) (variable enrollment) (variable enrollment) sources: california Healthcare foundation/norc california employer Health benefits survey: 2011. Kaiser/Hret survey of employer-sponsored Health benefits: 2011. 9 ©2011 california HealtHcare foundation California Employer Health Benefits cost of Health insurance Premium Increases Compared to Inflation, Family Coverage, << return to contents California, 1999–2011 Health insurance premiums for family coverage in 18% california grew by 8.1% 15.8%* 16% in 2011, statistically 13.4%* 14% unchanged in recent years. 11.4%* Premiums continue to 12% 10.0%* Premiums rise much faster than the 10% 8.7% 8.2%* 8.3% 8.3% 8.1% 8.1% california inflation rate. 7.5% 8% 6.7% 6% 4.8% Overall Inflation 4% 3.5% 3.1% 2% 0% -2% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 *estimates are statistically different from the previous year shown. sources: california Healthcare foundation (cHcf)/norc california employer Health benefits survey: 2007–2011. cHcf/Hsc california employer Health benefits survey: 2005–2006; cHcf/Hret california employer Health benefits survey: 2004. Kaiser/Hret california employer Health benefits survey: 1999 – 2003. california division of labor statistics and research, consumer Price index, california average of annual inflation (april to april) 1999 – 2011. 10 ©2011 california HealtHcare foundation