Your health insurance: Get ready to pay more

For most cubicle jockeys, October is synonymous with open-enrollment season - when workers commit to next year's employer-sponsored health insurance plans.

First Coast workers can expect health insurance premiums to continue their upward trek in 2008, though at a more sluggish pace. Nine-to-fivers should also brace for higher out-of-pocket expenses, and in some cases fewer plan choices.

Commercial plan premiums are expected to escalate about 9 percent to 13 percent next year, compared with 11 percent to 17 percent premium hikes area employers faced this year, said Chris Boetcker, manager at Alliance & Associates Financial Services, an insurance broker on the city's Westside.

Premium inflation is easing off after four or five years of rapid escalation, during which growth clocked in at 11 percent to 12 percent annually, Boetcker said.

"I just think that it's gotten to a point where things are leveling off some," he said.

Humana projects its group premiums in Northeast Florida to climb about 6.5 percent next year, compared with this year's 7 percent increase. Those premiums in the First Coast average about $3,500 annually, with employers typically covering at least half that.

The reduction in premium acceleration is partly because of "benefit buy-downs" by employers, said Laura Nolan, Humana's North Florida director of commercial sales.

An employer, for instance, might choose to offer a plan that has a lower premium but requires a higher deductible. Companies might also choose to cover a smaller percentage of the premiums.

Not every company expects premium increases to fall perceptibly.

Aetna expects its area employer-sponsored plan premiums to spike 10 percent to 15 percent next year, relatively unchanged from this year's increase, spokesman Walt Cherniak said.

Companies are feeling the pressure

With health insurance premiums up about 22 percent this year, Secure-Res, a Jacksonville-based marketing firm, has had to take the scalpel to its health benefits package.

The company used to cover 100 percent of premiums, but shaved its contribution to 75 percent two years ago. Even with the cutback, Secure-Res' employee health-care bill topped $130,000 this year.

Being able to offer health insurance coverage may be costly for the 45-employee firm, but not doing so could prove even more expensive, President and Chief Executive Joe Hyman said.

"The job market is relatively tight," he said, "so it's important to offer" health-care coverage to attract and keep talent.

So, Secure-Res and other firms find ways to be able to afford rising premiums.

"You budget for it [health care costs] like you do anything else," Hyman said. "You have to pass the cost onto your customer and you have to give up some benefits."

Chuck Bushong, CEO of Bushong Insurance Associated in Ponte Vedra Beach, has managed to not pass on the pain of rising health care costs to his employees.

Bushong's agency includes 15 employees, and he has watched his employee health insurance costs tick about 10 percent higher in the past year. The agency is bracing for a hike next year, but hopes it doesn't crawl past 10 percent.

"You never know until you get your renewal," Bushong said. "That's always the question mark."

Despite the bottom-line pressure, Bushong covers 100 percent of employee premiums - workers pay a $15 co-pay and are not subject to any deductibles. The plan, however, requires Bushong's employees seek care from network providers and get referrals before seeing a specialist.

Offering Options

Small companies are more likely to drop health insurance coverage for their employees. Less capitalized, they have fewer financial reserves to devote to rich health-care benefits.

Realizing that, insurers are offering flexible plans that make health insurance an affordable benefit.

Last week, Humana rolled out health insurance packages that cap the annual premium rate increases. Predictable health-care expenses, Humana said, allow companies to more accurately budget and plan for the long term.

Available for Florida businesses with 51 to 99 employees, each two-year package includes a combination of health insurance plans. For example, a package might include a traditional Preferred Provider Organization (PPO) plan in the first year, and a high-deductible health plan featuring a Health Savings Account in the second year.

Annual premium rate increases are capped at 6 percent in the second year, Humana said. Employers can qualify for a lower 4.5 percent medical premium rate cap in the second year by adding dental coverage and meeting other requirements.

Such initiatives might just keep Bushong and other business owners offering their employees' health insurance coverage. At least for a little longer.

"Someday, if things got out of control," Bushong said, "then we might make them [employees] participate." (Source: The Times-Union)