Corporate Updates

Companies health costs are increasing at a slower clip, but will that continue?



A sudden increase in the health insurance costs appears to be minimizing for most business owners. But with numerous crucial transformations still looming under the health care law, it remains ambiguous as to whether it will continue in the future as well.

Health costs for employers increased only 3 percent last year, according to the Kaiser Family Foundations recently released employer health benefits survey, matching the lowest annual growth rate since the group started tracking the numbers in 1999. Owners, especially those running small businesses, had historically been prone to double-digit increases from one year to the next.

Its the second straight year that the annual growth rate has slowed, according to Kaiser, mirroring several other reports of health costs rising more modestly for private businesses ” a pattern that Kaiser CEO Drew Altman called good news for employers and workers.


On one hand, the slowdown comes as a bit of a surprise, given that enrollment in new government-run insurance exchanges for small businesses ” generally considered one of the health care laws primary means of lowering rates for employers and the only way to secure some of the laws new tax credits ” has been very slow across the country. The Kaiser survey, which is based on responses from more than 3,000 firms, showed that only a tiny fraction of firms purchased plans through the new exchanges last year.

In addition, a new rule requiring many companies to provide comprehensive health plans were expected to increase costs for those that previously offered minimal or no insurance plans to their workers.

However, early renewal of existing health plans and a string of delays to that so-called employer mandate have allowed many firms to continue offering plans that do not comply with new minimum coverage requirements in the law. That has likely muted some of the rise in premiums we would otherwise see as employers shift to more robust, and thus more expensive, plans.

Some business advocacy groups and insurers have thus warned that rate spikes will start to flare back up in 2015 and 2016. Any enthusiasm regarding the recent slowdown, they argue, would be premature.

But at the same time, with a number of improvements coming to the federal governments online employer exchange this fall ” including a fully functional online shopping portal ” officials are optimistic that more small businesses will enroll in plans through the site this time around. If so, they say many firms could actually see their health costs go down, due to more transparent competition among insurers on the exchanges and tax credits available through the exchanges.

Of course, with last years glitchy experience still fresh in their minds, it remains to be seen how many business owners will make a return trip to

Therefore with several rules and policies yet to be implemented and the current health care exchanges unable to meet the expectations, its nearly tough to narrate as to how much of the present downfall in employer health costs would be adjusted and attributed to the health laws and most importantly whether it is really here to stay in the long run.

Follow and connect with us on Facebook, Twitter, LinkedIn, Elets video

Eletsonline News

Follow us on

Most Popular

200000+ Subscribers read it every day.
Subscribe Newsletter
To Top