Trends in Employer Sponsored Health Plans in the Western Region

Are you wondering how your organization’s health insurance plan compares to other employers’ plans in your area? Recent findings from MSEC’s 2015 Health and Welfare Plans Survey found that Colorado employers were experiencing an 8 percent increase in the cost of their health insurance plans at their last renewal after negotiations and plan changes. This increase is lower by 1 percent from the 2014 survey for Colorado employers. Employers in Arizona reported a 9 percent increase, while Wyoming employers had the lowest increase at 6 percent, as reported in the survey.

Survey findings were collected from 505 organizations in Arizona, Colorado, and Wyoming. These 505 employers represented a cross-section of industries, including government, manufacturing, natural resources, nonprofit, technology, financial and real estate, insurance, health care, retail and wholesale, service, construction, and utilities.

Early projections for 2016 health insurance increases are at 7 percent in Arizona, 8 percent in Colorado, 12 percent in Utah, and 6 percent in Wyoming. These projections are from MSEC’s recent Planning Packet Survey, which collected 2016 projected health insurance increases from members in Arizona, Colorado, Utah, and Wyoming. We will update 2016 health insurance increases in our 2016 Health and Welfare Plans Survey when it publishes in August of next year.

The key finding from the 2015 survey showed that the 2015 Colorado average premium for single coverage for all plan types combined (HMO, PPO, POS, HDHP) is $533, which is a 14 percent increase from $467 in 2011. In Arizona, the 2015 average monthly premium is $481, and in Wyoming, it is $566.

Survey ChartOther findings from the 2015 survey:

  • Percentage of Health Coverage Paid by Employer: For single coverage (employee only) in Colorado, on average the employer pays 84 percent of the premium. In Arizona, it’s 79 percent, while in Wyoming, it climbs to 88 percent.
  • Types of Plans Offered: Sixty-four percent of Colorado employers offer a Preferred Provider Organization (PPO) plan, and 52 percent offer a High Deductible Health Plan (HDHP). Seventy-two percent of Arizona respondents offer a PPO plan, with 53 percent offering an HDHP. In Wyoming, 46 percent of employers offer a PPO, while 50 percent offer an HDHP. Multiple plan options were reported.
  • Employer Contributions to Health Savings Account (HSA): Many employers offering an HDHP contribute to employees’ HSA accounts. In Colorado, 86 percent of employers with HDHP plans contribute an average annual amount of $684; Arizona employers contribute an average annual amount of $493; and Wyoming respondents contribute $657.
  • Health Care Cost Per Covered Employee: In Colorado, the average 2014 health care cost per covered employee was $10,600. In Arizona, the figure was $7,604, and in Wyoming, $12,695.
  • Health Coverage Self-Insured/Self-Funded: Forty-five percent of Colorado respondents have a self-insured/ self-funded plan. In Wyoming, the figure rises to 67 percent, while only 34 percent of Arizona respondents have them.
  • Encourage Participation in Wellness Programs: Fifty-four percent of Colorado and Wyoming respondents incentivize wellness participation. In Arizona, the figure is 38 percent of respondents.

The survey results indicate employers are experiencing lower health insurance increases in the last couple of years after negotiating and making plan changes to their offering. The three most common cost-containment methods employers used to lower their health insurance costs in 2015 were increasing the employee cost for single coverage; increasing the employee cost for dependent coverage; and raising deductible, co-insurance levels, and/or copay levels.