California Employer Health Benefits: Workers Shoulder More Costs JUNE 2018 California Employer Health Benefits Executive Summary From 2000 to 2017, the percentage of employers offering health insurance coverage has declined CONTENTS from 69% to 56%. At the same time, workers are shouldering more of the costs for their health care Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 with increasing premiums and higher deductibles and copays. Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 California Employer Health Benefits: Workers Shoulder More Costs presents data compiled from the 2017 California Employer Health Benefits Survey. Cost of Health Insurance. . . . . . . . . . . . . . . . . 11 Benefits and Cost Sharing . . . . . . . . . . . . . . . 22 KEY FINDINGS INCLUDE: • From 2016 to 2017, health insurance premiums for family coverage increased by 4.6%, Plan Choice and Enrollment. . . . . . . . . . . . . 37 slightly higher than the 3.0% inflation rate. Employer Views and Practices . . . . . . . . . . . 41 • Average monthly premiums, including the employer portion, were significantly higher in California than the national average. In 2017, the average premium was $604 for single Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 coverage and $1,643 for family coverage. • California workers paid an average of 17% of the total premium for single coverage and 27% for family coverage. • One in 4 workers had an annual deductible of at least $1,000 for single coverage. Large deductibles were more common among workers in small firms (3 to 199 workers) than larger firms. Nearly 60% of workers had no deductible. • In 2017 25% of California firms reported increasing cost sharing for workers in the past year, and 37% reported that they are very or somewhat likely to increase their workers’ share of premiums in the next year. CALIFORNIA HEALTH CARE FOUNDATION 2 California Employer Health Benefits Employers, Workers, and Covered Workers, by Firm Size Overview California vs. United States, 2017 In 2017, California firms with 3 to NUMBER OF WORKERS í 3–9 í 10–49 í 50–199 í 200–999 í 1,000+ 49 workers accounted for 92% of 2% 1% Employers* all employers, but just 27% of CA 61% 31% 6% all workers, and 20% of workers US 61% 32% 6% with health coverage, similar to 1%<1% national firms. Workers CA 9% 18% 14% 12% 46% US 8% 16% 14% 14% 49% Covered Workers CA 6% 14% 15% 14% 51% US 3% 12% 14% 15% 56% *Estimates are statistically different between California and US. Note: Segments may not add to 100% due to rounding. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; author analysis of Survey of Employer-Sponsored Health Benefits public use file: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 3 California Employer Health Benefits Employers Offering Coverage Coverage California vs. United States, 2000 to 2017 The percentage of California California United States employers offering health insurance in 2017 (56%) was similar to the overall US rate of 53%. The offer 73% 70% 71% 70% 71% 71% 70% 69%* 69% 67% 67% rate among California firms has 63%* 68% 68% 60% 61% 66% 66% 69%* 58% 57% been fairly stable since 2012. 55% 63% 60% 61% 59% 63% 59% 60%* 61% 56% 57% 55% 57% 56% 53% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Estimates are statistically different from the previous year shown. Sources: California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; California Employer Health Benefits Survey: 2005–2006, CHCF/HSC; California Employer Health Benefits Survey: 2004, CHCF/HRET; California Employer Health Benefits Survey: 2000–2003, Kaiser/HRET; Survey of Employer-Sponsored Health Benefits: 2000–2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 4 California Employer Health Benefits Employers Offering Coverage, by Firm Characteristics Coverage California, 2017 Whether a firm offers health All Firms insurance coverage to their 56% employees varies widely by firm Many Lower-Wage Workers* 19% characteristics. Firms that employ Fewer Lower-Wage Workers* many lower-wage or part-time 60% workers were much less likely to Many Part-Time Workers* offer health insurance than those 12% that employ fewer of these workers. Fewer Part-Time Workers* 72% Most companies with union workers At Least Some Union Workers (83%) also offered coverage. 83% No Union Workers 56% *Estimate is statistically different from all other firms. Notes: Firms with many lower-wage workers are defined as firms with 35% or more of workers earning $23,000 or less per year. Firms with fewer lower-wage workers are those with less than 35% of workers earning that amount. Many part-time workers is defined as 35% or more of the workforce working part-time. Fewer part-time workers is the inverse. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 5 California Employer Health Benefits Employers Offering Coverage, by Firm Size Coverage California vs. United States, 2017 Slightly less than half (44%) í California í United States of California’s smallest firms 96% 98% 98% 100% 99% (three to nine workers) offered 92% coverage in 2017, while the vast majority of larger firms did so. 70% 69% Offer rates for California employers were similar to national figures. 56% 53% 44% 40% All Firm Sizes 3–9 10–49 50–199* 200–999 1,000+ Number of Workers *Estimates are statistically different between California and US. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; author analysis of Survey of Employer-Sponsored Health Benefits public use file: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 6 California Employer Health Benefits Employee Eligibility, Take-Up Rates, and Coverage Coverage California vs. United States, 2017 Not all employees are eligible for Eligible Workers Who… health insurance offered by their Take Up Coverage firm, and not all who are eligible 80% 79% 78% elect to participate. Eighty percent 78% of people working in California firms 63% 62% offering coverage were eligible for health benefits in 2017. Of those í California í United States eligible, 78% elected to enroll, resulting in a 63% coverage rate. Eligible Workers Covered Workers Note: Tests found no statistically different estimates between California and US. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Survey of Employer-Sponsored Health Benefits: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 7 California Employer Health Benefits Worker Coverage Rates Among Firms Offering Health Benefits Coverage by Firm Size, California, 2009 to 2017, Selected Years Insurance coverage rates among All Firms í 2009 California employers offering health 65% í 2011 í 2013 benefits have been fairly stable 67% í 2015 68% í 2017 since 2009, with year-to-year 63% 63% changes not statistically significant. Small Firms (3–199 workers) Large and small firms had similar 67% 66% coverage rates. 67% 66% 66% Large Firms (200+ workers) 64% 67% 69% 62% 61% Note: Tests found no statistically different estimates from previous year shown within firm size. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 8 California Employer Health Benefits Plan Options Available to Covered Workers, by Type Coverage California vs. United States, 2017 Covered California workers were í California í United States significantly less likely to have an 70% 71% 73% HDHP/SO option, and significantly more likely to have an HMO option, 57% than workers nationally. Seventy percent of covered California workers had an HMO option, 33% 33% compared to only 33% of covered workers nationally. 16% 15% 0% 1% Conventional* POS HDHP/SO* HMO* PPO *Estimates are statistically different between California and US. Notes: Conventional is fee-for-service plans. POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 9 California Employer Health Benefits Enrollment of Covered Workers, by Plan Type Coverage California vs. United States, 2009 to 2017, Selected Years California workers were more likely í Conventional í HMO í PPO í POS í HDHP/SO to enroll in HMOs, while workers California nationally were more likely to enroll 2009 0% 54% 31% 11% 5% 2011* 0% 54% 35% 6% 6% in PPO plans. The percentage of 2013 0% 53% 31% 9% 6% California workers enrolled in high- 2015 <1% 56% 28% 7% 9% deductible health plans more than 2017 0% 50% 28% 9% 13% doubled between 2009 to 2017 in United States California to 13%, and the national 2009* 1% 20% 60% 10% 8% percentage more than tripled. 2011* 1% 17% 55% 10% 17% 2013* <1% 14% 57% 9% 20% 2015 1% 14% 52% 10% 24% 2017 <1% 14% 48% 10% 28% *Distribution is statistically different from previous year shown. Notes: Conventional is fee-for-service plans. POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Segments may not add to 100% due to rounding. Sources: California Employer Health Benefits Survey: 2009–2017, CHCF/NORC; author analysis of data from the Employer Health Benefits Survey public use files: 2009–2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 10 California Employer Health Benefits Average Annual Premiums, by Plan Type Cost of Health Insurance Single vs. Family Coverage, California, 2017 In California, the average annual Single premiums were $7,251 for single All Plans $7,251 coverage and $19,721 for family HMO $6,934 coverage. PPO premiums were the PPO $8,765* highest of all plan types. POS $6,071* HDHP/SO $6,052* Family All Plans $19,721 HMO $18,990 PPO $21,852* POS $19,704 HDHP/SO $18,000* *Distribution is statistically different from all plans. Notes: POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 11 California Employer Health Benefits Average Increase in Annual Premiums, by Plan Type Cost of Health Insurance California, 2017 Overall premiums increased by 4.6% from 2016 to 2017. HMO 6.2% plans experienced the smallest 5.4% increase at 3.9%. 5.1% 4.6% 3.9% All Plans HMO PPO HDHP/SO POS Notes: Tests found no significantly different estimates between all plans and specific plan types. POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 12 California Employer Health Benefits Average Increases in Premiums, Family Coverage Cost of Health Insurance Fixed vs. Variable Enrollment, California vs. United States, 2017 Among California firms that offered the same health plan or plans in 2016 and 2017 (fixed enrollment), 4.6% the average premium increase for family coverage was 4.6%. For those firms that changed plans or 3.0% had workers who switched plans (variable enrollment), the average family premium increase was substantially less, at 0.6%. 0.6% California California United States (fixed enrollment) (variable enrollment) (variable enrollment) Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Survey of Employer-Sponsored Health Benefits: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 13 California Employer Health Benefits Annual Premium Growth Compared to Inflation Cost of Health Insurance Family Coverage, California, 2002 to 2017 Health insurance premiums for Premiums Overall Inflation family coverage in California 15.8%* grew by 4.6% in 2017. Premiums 13.4%* 11.4%* continued to rise faster than the California rate of inflation. 8.2%* 8.7% 8.3% 8.3% 8.1% 8.1% 7.5% 6.4%* 5.7% 6.0% 5.6% 4.5%* 4.6% 3.9% 4.2% 3.0% 2.8% 2.7% 3.4% 3.0% 3.1% 2.2% 1.7% 1.8% 1.7% 1.4% 1.9% 1.1% –0.6% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Estimates are statistically different from the previous year shown. Sources: California Employer Health Benefits Survey: 2002–2003, Kaiser/HRET; California Employer Health Benefits Survey: 2004, CHCF/HRET; California Employer Health Benefits Survey: 2005–2006, CHCF/HSC; California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; California Average of Annual Inflation (April to April): 2002–2017, California Division of Labor Statistics and Research. CALIFORNIA HEALTH CARE FOUNDATION 14 California Employer Health Benefits Cumulative Premium Growth Compared to Inflation Cost of Health Insurance Family Coverage, California, 2002 to 2017 Since 2002, health insurance Premiums Overall Inflation 260% premiums in California have 248.8% 240% increased by 249%, nearly six times 220% the increase in the state’s overall 200% inflation rate. 180% 160% 140% 120% 100% 80% 60% 13.4% 44.4% 40% 2.8% 20% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sources: California Employer Health Benefits Survey: 2002–2003, Kaiser/HRET; California Employer Health Benefits Survey: 2004, CHCF/HRET; California Employer Health Benefits Survey: 2005–2006, CHCF/HSC; California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; California Average of Annual Inflation (April to April): 2002–2017, California Division of Labor Statistics and Research. CALIFORNIA HEALTH CARE FOUNDATION 15 California Employer Health Benefits Average Monthly Premiums, by Plan Type Cost of Health Insurance California vs. United States, 2017 Overall average monthly premiums Single Coverage All Plans* $604 for single and family coverage were $558 í California $578 c í United States significantly higher in California HMO $588 $730 than nationally. Differences in plan PPO* $580 $506 design may account for some of POS $560 $504 the differences. For HMOs, the most HDHP/SO $502 common plan type in California, Family Coverage All Plans* $1,643 premiums were similar. In California, $1,564 $1,583 average monthly premiums for HMO $1,589 $1,821 single PPO plans were 25% higher PPO* $1,623 $1,642 than the national average. POS $1,512 HDHP/SO $1,500 $1,465 *Estimates are statistically different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 16 California Employer Health Benefits Average Monthly HMO Premiums, Single Coverage Cost of Health Insurance California vs. United States, 2002 to 2017 From 2002 to 2010, California’s California United States $600 $588 average monthly HMO premium for $578 single coverage stayed below that $500 of the US except in 2006. In 2011, $400 however, it exceeded the national rate. In 2017, California’s single $300 HMO premium was similar to $233 the national figure. $200 $196 $100 2002* 2003* 2004* 2005* 2006 2007* 2008* 2009 2010 2011* 2012* 2013 2014 2015 2016 2017 *Estimates are statistically different between California and US. Notes: Annual rate of change for HMO single premiums should not be calculated by comparing dollar values from one year with the previous year, due to both the survey’s sampling design and the way in which plan information is collected. Rates of change in family premiums are collected directly as a question in the survey (no change data for single premiums are collected). Sources: California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; California Employer Health Benefits Survey: 2005–2006, CHCF/HSC; California Employer Health Benefits Survey: 2004, CHCF/HRET; California Employer Health Benefits Survey: 2002–2003, Kaiser/HRET; Employer Health Benefits Survey: 2002–2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 17 California Employer Health Benefits Annual Worker and Employer Premium Contributions Cost of Health Insurance California vs. United States, 2017 California workers contributed í Worker í Employer an average of $996 annually for Single Coverage single coverage and $5,040 for CA $996 $6,255 $7,251 family coverage in 2017. Employer US $1,213 $5,477 $6,690 contributions to single and family premiums were higher in California Family Coverage than nationally. CA $5,040 $14,681 $19,721 US $5,714 $13,049 $18,764 Notes: Estimates are statistically different between California and US within both coverage types and both contributors. Segments may not add to totals due to rounding. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 18 California Employer Health Benefits Worker Share of Premium Cost of Health Insurance California vs. United States, 2017 Distribution of workers’ share of í No Contribution í 1%–25% í 26%–50% í >50% premium was similar for California and the nation. Fourteen percent Single Coverage CA 16% 52% 30% of California workers paid more 1% than half of the premium for US 14% 60% 25% family coverage. 1% Family Coverage CA 3% 45% 38% 14% US 3% 44% 37% 16% Notes: Tests found no significantly different estimates between California and US. Segments may not add to 100% due to rounding. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 19 California Employer Health Benefits Worker Share of Premium, by Firm Size Cost of Health Insurance California, 2017 Workers’ share of premium differed í No Contribution í 1%–25% í 26%–50% í >50% significantly by size of firm. For family coverage, 27% of workers Single Coverage All Firms 16% 52% 30% in small firms paid more than half 1% of the premium, compared to only Small Firms* (3–199 workers) 26% 37% 35% 2% 6% of workers in large firms. For Large Firms* (200+ workers) 11% 61% 27% single coverage, small firms were 1% more likey to pay for the entire Family Coverage All Firms — 3% 45% 38% 14% premium than large firms. Small Firms* (3–199 workers) 6% 24% 43% 27% Large Firms* — 2% (200+ workers) 56% 35% 6% *Difference is statistically different between small and large firms within coverage type. Note: Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 20 California Employer Health Benefits Worker Share of Premium, Single and Family Coverage Cost of Health Insurance California, 2009 to 2017 California workers paid an average Single Family of 17% of the total premium for single coverage and 27% 33% for family coverage in 2017. The 29%* 27% 27% 26% 26%* 27% corresponding annual premium 26% 25% contributions were $996 and $5,040 for single and family, respectively 22% (not shown). 16% 17% 17%* 16%* 17% 15% 13% 12% 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Estimates are significantly different from previous year shown. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 21 California Employer Health Benefits Workers with Office Visit Copayments Benefits and Cost Sharing California, 2009 to 2017, Selected Years About 84% of workers in California PER VISIT COPAY í $5 í $10 í $15 í $20 í $25 í $30 í Other had a copay for office visits (not shown). The percentage of workers 2009 5% 19% 33% 22% 9% 6% 5% with a copayment of $25 or $30 2011 18% 26% 29% 11% 11% 6% increased from 24% in 2013 to 32% <1% in 2017. A copay of $20 was the 2013 8% 15% 44% 13% 11% 8% most common in 2017. 1% 2015 6% 13% 44% 13% 12% 10% 1% 2017 9% 14% 34% 15% 17% 10% 1% Notes: Tests found no significantly different estimates from previous year shown. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 22 California Employer Health Benefits Workers with Office Visit Copayments, by Plan Type Benefits and Cost Sharing California, 2009 to 2017, Selected Years Distribution of copayments for PER VISIT COPAY í $5 í $10 í $15 í $20 í $25 í $30 í Other primary care office visits has shifted HMO 2009 7% 20% 35% 22% 8% 6% 2% since 2009, with far fewer workers 2011 1% 24% 27% 25% 9% 8% 5% having copayments of $5 or $10. 2013 1% 11% 15% 48% 10% 10% 5% 2015 1% 8% 13% 46% 14% 10% 8% 2017 2% 11% 12% 37% 12% 18% 7% PPO (in-network) 2009 1% 16% 29% 28% 12% 6% 7% 2011 10% 24% 31% 16% 11% 6% 2013 4% 12% 36% 19% 12% 17% 2015 <1% 7% 10% 37% 12% 22% 12% 2017 4% 10% 28% 22% 23% 13% POS (in-network) 2009 3% 20% 23% 35% 5% 4% 9% 2011 7% 6% 33% 9% 27% 19% 2013 2% 23% 37% 17% 14% 8% 2015 6% 21% 26% 21% 10% 15% 2017 11% 40% 17% 14% 13% 4% Notes: POS means point-of-service plan. Tests found no significantly different estimates from previous year shown. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 23 California Employer Health Benefits Workers with Annual Deductible, Single Coverage Benefits and Cost Sharing by Plan Type, California vs. United States, 2017 In California, 43% of workers with í California í United States $2,470 $2,304 single coverage were likely to have 100% 100% $816 $1,046 a deductible compared to 81% $1,505 87% 86% in the nation as a whole. Those 81% $1,301 enrolled in HMO and POS plans 65% were less likely to have a deductible $996 in California (17% and 25%, $1,175 43% respectively) than in the nation 38% $2,409 (38% and 65%, respectively). $1,650 25% 17% All Plans HMO*† POS*† PPO† HDHP/SO (in-network) (in-network) *Percentages are significantly different between California and US. † Average deductibles are significantly different between California and US. Notes: POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Dollar figures represent average annual deductibles. Sources: California Employer Health Benefits Survey: 2017, CHCF/NORC; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 24 California Employer Health Benefits Workers with a Large Deductible ($1,000+), Single Coverage Benefits and Cost Sharing California vs. United States, 2006 to 2017 One in four workers with single California United States coverage was likely to have an 51% 51% annual deductible of $1,000 or 46% more, compared to one in two 41% nationwide. The share of California 38% 34% workers with a large deductible 31% increased from 6% in 2006 to 27%* 22%* 25% in 2017. 18%* 22% 25% 25% 20% 12%* 17% 10% 14% 14% 12% 13% 10% 9% 6% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *United States estimate is statistically different from previous year shown. Sources: California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; California Employer Health Benefits Survey: 2006, CHCF/HSC; Employer Health Benefits Survey: 2006 – 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 25 California Employer Health Benefits Workers with a Large Deductible ($1,000+), Single Coverage Benefits and Cost Sharing by Firm Size, California, 2006 to 2017 Large deductible ($1,000+) All Firms Small Firms (3–199 workers) Large Firms (200+ workers) plans were more common among 43% workers in smaller firms. Forty- 41% 41% three percent of workers in small firms (3 to 199 workers) had an 32% 32% annual deductible of $1,000 or 27% 27% 26% 25% 25% more for single coverage in 2017, 22% 21%* 20% compared to 15% in larger firms. 17% 14% 14% 14% The percentage of workers in 11% 13% 17% 12% 7% 10% 9% 14% 15% small firms with large-deductible 6% 11% 10% 8% 9% plans has increased substantially 6% 5% 5% 5% 5% since 2006. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Estimate is statistically different from previous year shown by firm size. Sources: California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; California Employer Health Benefits Survey: 2006, CHCF/HSC; Employer Health Benefits Survey: 2006–2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 26 California Employer Health Benefits Deductibles for Single Coverage, by Plan Type Benefits and Cost Sharing California, 2017 Among the 43% of California í <$500 í $500–$999 í $1,000–$1,999 í $2,000+ workers who faced a deductible for single coverage (not shown), All Plans 21% 22% 19% 37% 37% had a deductible of $2,000 or more. This figure nearly doubled HMO 15% 29% 23% 34% since 2016, perhaps due in part to PPO* increasing enrollment in HDHP/SO (in-network) 32% 44% 16% 8% plans (not shown). POS (in-network) 17% 18% 31% 34% HDHP/SO* 25% 75% *Distribution is statistically different from all plans. Notes: Data based on workers with a deductible. POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 27 California Employer Health Benefits Deductibles for Single Coverage, All Plans Benefits and Cost Sharing California, 2009 to 2017, Selected Years The distribution of deductible í <$500 í $500–$999 í $1,000–$1,999 í $2,000+ amounts has changed since 2009. Of workers with single coverage 2009 50% 19% 25% 7% and a deductible, the percentage with a deductible of $2,000 or more 2011 45% 27% 14% 14% was five times more in 2017 than it was in 2009. During the same 2013 38% 18% 19% 25% period, the percentage of workers 2015 29% 22% 27% 22% with no deductible decreased from 68% to 57% (not shown). 2017 21% 22% 19% 37% Notes: Data based on workers with a deductible. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 28 California Employer Health Benefits Deductibles for Single PPO Coverage Benefits and Cost Sharing California vs. United States, 2009 to 2017, Selected Years Since 2009, California workers í <$500 í $500–$999 í $1,000–$1,999 í $2,000+ have been faced with increasing California deductibles for single PPO coverage. 2009 65% 26% 7% 2% In 2017, 24% of California workers 2011 58% 32% 6% 4% in PPO plans with a deductible 2013* 45% 24% 14% 17% 2015 33% 37% 20% 10% faced deductibles of $1,000 or 2017 32% 44% 16% 8% more, compared to 9% in 2009. United States Nationally, the percentage of 2009 48% 32% 14% 6% workers with deductibles of 2011 47% 32% 14% 7% $1,000 or more increased from 2013* 39% 35% 17% 9% 20% in 2009 to 43% in 2017. 2015 27% 38% 24% 11% 2017 20% 36% 30% 13% *Distribution is statistically different from previous year shown. Notes: Includes in-network use only. Segments may not add to 100% due to rounding. Sources: California Employer Health Benefits Survey: 2007–2017, CHCF/NORC; Employer Health Benefits Survey, 2007–2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 29 California Employer Health Benefits Deductibles for Family Coverage, by Plan Type Benefits and Cost Sharing California, 2017 Among California workers with í <$500 í $500–$999 í $1,000–$1,999 í $2,000+ an aggregate family deductible in 2017, 59% faced a deductible of All Plans 16% 22% 59% $2,000 or more. 2% HMO 10% 32% 57% 1% PPO* (in-network) 8% 25% 46% 21% POS (in-network) 17% 18% 65% HDHP/SO 100% *Distribution is statistically different from all plans. Notes: Data based on workers with an aggregate family deductible. Approximately 938,000 workers who had a separate per-person deductible were not included. POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $2,000 for family coverage. No test was done comparing HDHP/SO with all plans. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 30 California Employer Health Benefits Deductibles for Family Coverage, All Plans Benefits and Cost Sharing California, 2009 to 2017, Selected Years For workers with an aggregate í <$500 í $500–$999 í $1,000–$1,999 í $2,000+ family deductible, a much larger percentage faced a deductible of 2009 25% 35% 17% 23% $1,000 or more in 2017 than in 2009. 2011 9% 34% 23% 35% 2013 7% 27% 14% 52% 2015 6% 20% 21% 53% 2017 16% 22% 59% 2% Notes: Data based on workers with an aggregate family deductible. Workers who had a separate per-person deductible were not included. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 31 California Employer Health Benefits Annual Out-of-Pocket Limits, Single Coverage Benefits and Cost Sharing by Plan Type, California, 2017 Out-of-pocket limits, a plan feature í <$1,000 í $1,000–$1,499 í $1,500–$1,999 í $2,000–$2,499 that helps limit costs for consumers, í $2,500–$2,999 í $3,000+ í No Limit can vary greatly and are limited All Plans 6% 35% 9% 8% 38% 3% by the Affordable Care Act. While 2% nearly all covered workers with HMO 5% 51% 8% 5% 27% 4% <1% single coverage had an out-of- PPO* 5% 14% 7% 13% 8% 50% 4% pocket limit, for 38% of workers (in-network) that limit was $3,000 or more, and POS (in-network) 3% 41% 3% 21% 31% 3% of workers had no limit. 1% HDHP/SO* 3% 6% 89% <1%, <1%, 1% *Distribution is statistically different from all plans. Notes: POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage. Since HMOs typically provide very comprehensive coverage, not having a limit on out-of-pocket expenditures does not expose enrollees to the same financial risk as it could in other plan types. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 32 California Employer Health Benefits Annual Out-of-Pocket Limits, Family Coverage Benefits and Cost Sharing by Plan Type, California, 2017 Only 19% of covered California í <$2,000 í $2,000–$2,999 í $3,000–$3,999 í $4,000–$4,999 workers with family coverage had í $5,000–$5,999 í $6,000+ í No Limit an annual aggregate out-of-pocket All Plans 19% 4% 28% 10% 6% 30% limit of less than $2,000, while 2% 30% had a limit of $6,000 or more. HMO 15% 5% 45% 7% 4% 21% 3% Two percent of covered workers had PPO* 30% 6% 8% 7% 7% 39% 3% no out-of-pocket limit. (in-network) POS (in-network) 7% 7% 37% 18% 30% 1% HDHP/SO* 13% 3% 5% 77% <1% 2% *Distribution is statistically different from all plans. Notes: POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $2,000 for family coverage. Since HMOs typically provide very comprehensive coverage, not having a limit on out-of-pocket expenditures does not expose enrollees to the same financial risk as it could in other plan types. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 33 California Employer Health Benefits Annual Out-of-Pocket Limits, Single PPO Coverage Benefits and Cost Sharing California, 2009 to 2017, Selected Years The proportion of California workers í <$1,000 í $1,000–$1,499 í $1,500–$1,999 í $2,000–$2,499 in PPOs with an out-of-pocket í $2,500–$2,999 í $3,000+ í No Limit limit of $3,000 or more for single 2009 8% 18% 10% 20% 10% 22% 13% coverage increased from 22% in 2009 to 50% in 2017. Only five 2011* 5% 13% 15% 13% 9% 29% 15% percent had a deductible of less than $1,000. 2013 3% 13% 6% 15% 15% 40% 9% 2015 —2% 17% 13% 11% 13% 43% 2% 2017 5% 14% 7% 13% 8% 50% 4% *Distribution is statistically different from previous year shown. Notes: Includes in-network use only. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 34 California Employer Health Benefits Workers’ Cost Sharing for Prescription Drugs Benefits and Cost Sharing California vs. United States, 2009 to 2017, Selected Years In 2017, 59% of covered California í One Tier í Two Tier í Three Tier í Four Tier í Other workers had a three- or four- California tier cost-sharing formula for 2009 9% 30% 55% 4% 1% prescription drugs, compared 2011* 8% 27% 61% 3% 1% 2013 9% 22% 59% 7% 3% to 84% nationally. The share of 2015* 3% 37% 42% 16% 2% California workers with four tiers 2017 6% 31% 38% 21% 3% has increased substantially over United States time, from 1% in 2009 to 21% 2009 5% 12% 67% 11% 6% in 2017. 2011* 7% 11% 63% 14% 4% 2013* 5% 10% 59% 23% 4% 2015 8% 7% 58% 23% 5% 2017 5% 7% 40% 44% 4% *Distribution is statistically different from previous year shown. Notes: One tier is the same cost share regardless of drug type. Two tier is one payment for generic drugs and one for brand name. Three tier is one payment for generic drugs, another for preferred drugs, and a third for nonpreferred drugs. Four tier is three-tier cost sharing plus a fourth tier for lifestyle or other specified drugs. Other includes no cost sharing. Preferred drugs are listed in a plan’s formulary. Nonpreferred drugs are not listed in the formulary. Segments may not add to 100% due to rounding. Sources: California Employer Health Benefits Survey: 2009–2017, CHCF/NORC; author analysis of data from the Survey of Employer-Sponsored Health Benefits: 2007–2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 35 California Employer Health Benefits Average Prescription Drug Copayments, by Drug Type Benefits and Cost Sharing California, 2009 to 2017, Selected Years Among firms with four-tier Generic Drugs í 2009 prescription cost sharing, average $10.00 í 2011 $9.96 í 2013 copayments for generic drugs were $10.04 í 2015 í 2017 less than half what they were for $11.44 $11.53 preferred drugs, and a quarter Preferred Drugs what they were for nonpreferred $22.40 $24.35 drugs. Copayments for preferred $25.47 $30.85 and nonpreferred drugs increased $31.98 between 2009 and 2017. Nonpreferred Drugs $39.20 $43.50* $41.85 $47.17* $51.39 *Estimate is statistically different from previous year shown. Notes: Preferred drugs are listed in a plan’s formulary. Nonpreferred drugs are not listed in the formulary. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 36 California Employer Health Benefits Firms Offering a High-Deductible Health Plan, by Firm Size Plan Choice and Enrollment California, 2017 Compared to other plan types, í All Firms í Small Firms í Large Firms (3–199 workers) (200+ workers) HDHPs typically expose workers to 69% 70% higher out-of-pocket costs. Sixty- 66% 60% nine percent of all California firms 53% 53% offered a high-deductible health plan (HDHP) in 2017. Of these firms, 5% offered an HDHP with a health reimbursement agreement (HRA), while 53% offered an HDHP with a 20% health savings account (HSA). 5% 4% HDHP HDHP HDHP (HSA-eligible) (HRA-eligible) Notes: Tests found no significant differences between small firms and large firms. HDHPs (high-deductible health plans) have a deductible of at least $1,000 for single coverage, and at least $2,000 for family coverage. HRAs (health reimbursement arrangements) are employer-sponsored accounts that provide financial assistance for out-of-pocket health care expenses, and HSAs (health savings accounts) allow employers or employees (and their families) to contribute to a tax-advantaged account that can be used to pay for IRS-approved health care expenses. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 37 California Employer Health Benefits Enrollment in Self-Insured Plans Plan Choice and Enrollment California, 2009 to 2017, Selected Years The percentage of workers enrolled in employer self-insured plans has 2009 31% remained relatively stable. 2011 33% 2013 36% 2015 32% 2017 31% 0 8 16 24 32 40 Notes: Self-insured plans are plans for which an employer assumes some or most responsibility for paying health care claims rather than buying coverage from an insurer. Tests found no significantly different estimates from the previous year shown. Source: California Employer Health Benefits Survey: 2009 –2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 38 California Employer Health Benefits Workers in Self-Insured Plans, by Plan Type Plan Choice and Enrollment California vs. United States, 2017 Thirty-one percent of covered í California í United States workers in California were enrolled 71% 67% in a partly or completely self- 64% 60% insured plan in 2017, compared with 60% nationally. The difference 52% between the state and national 39% figures is likely associated with California’s high HMO enrollment, 31% 24% since HMOs are less likely than other 18% plans to be self-insured. 13% All Plans* HMO* POS HDHP/SO PPO *Estimates are statistically different between California and US. Notes: Self-insured plans are plans for which an employer assumes some or most responsibility for paying health care claims rather than buying coverage from an insurer. POS means point-of-service plan. HDHP/SO means high-deductible plan with savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. Sources: California Employer Health Benefits Survey, CHCF/NORC: 2017; Employer Health Benefits Survey: 2017, Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 39 California Employer Health Benefits Firms Covering Telemedicine and Retail Clinics Plan Choice and Enrollment Plans with Largest Enrollment, California, 2017 Nearly two-thirds of large firms COVERAGE INCLUDES… Telemedicine Includes Behavioral Health Visits offered coverage for telemedicine 59% services, and over half of these 64% 54% firms also included coverage for 52% behavioral health telemedicine 49% visits. About half of small firms 41% í Small Firms (3–199 workers) covered care received at a í Large Firms (200+ workers) retail clinic. Telemedicine Retail Clinic Note: Tests found no significant differences between small firms and large firms. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 40 California Employer Health Benefits Likelihood of Firms Making Changes in the Next Year Employer Views and Practices by Type of Change, California, 2017 Thirty-seven percent of California í Very í Somewhat í Not Too í Not at All í Don’t Know firms reported they are very likely Increase Worker Share of Premium or somewhat likely to increase 26% 11% 11% 51% 1% the amount that workers pay for Increase Worker Deductible 11% 17% 16% 55% premiums in the next year. Twenty- Increase Worker Coinsurance or Copay Amount 1% eight percent of firms stated that 10% 5% 27% 57% they are very likely or somewhat 2% Increase Worker Prescription Drug Cost likely to increase employees’ 8% 7% 28% 55% deductibles, and 15% stated that 2% Restrict Worker Eligibility for Coverage they are very likely or somewhat 7% 91% <1, 1% likely to increase what employees <1% Drop Coverage Entirely pay for prescriptions, copays, 97% <1, <1%, 2% <1% or coinsurance. Note: Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 41 California Employer Health Benefits Likelihood of Firms Making Selected Changes in the Next Year Employer Views and Practices by Firm Size, California, 2017 Compared to small firms, larger í Very í Somewhat í Not Too í Not at All í Don’t Know firms in California were more likely to report that they are very likely Increase Worker’s Share of Premium or somewhat likely to increase Small Firms* (3–199 workers) 26% 11% 12% 52% 1% the amount employees pay for Large Firms* 34% 20% 11% 30% 4% (200+ workers) health insurance premiums in the coming year. Increase Worker’s Coinsurance or Copay Amount Small Firms (3–199 workers) 10% 5% 27% 56% 2% Large Firms (200+ workers) 7% 7% 20% 63% 3% *Estimate is statistically different between small and large firms. Note: Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 42 California Employer Health Benefits Firms That Made Selected Changes in the Past Year Employer Views and Practices by Firm Size and Region, California, 2017 In the past year, 25% of California INCREASED firms increased cost sharing for MOVED BENEFIT REDUCED SCOPE INCENTIVES TO INCREASED OPTIONS TO OF COVERED USE LESS COSTLY COST SHARING HRA OR HSA* BENEFITS PROVIDERS workers and 4% reduced covered FIRM SIZE benefits. Of firms offering an Small Firms (3–199 workers) 25% 40% 4% 7% Large Firms 23% 15% 2% 12% HDHP/SO, 39% reported that they • 200–999 workers 25% 15% 2% 13% moved their benefit options to an • 1,000+ workers 19% 14% 1% 11% HRA or HSA within the last year. REGION Los Angeles 10% 17% <1% 12% San Francisco 50% 79%† <1% 1%† Rest of State 25% 19%† 8% 7% All Firms 25% 39% 4% 7% *Asked only of firms offering an HDHP/SO option. † Estimates are statistically different from all other firms. Note: Los Angeles and San Francisco are defined as the metropolitan statistical area (MSA). Source: California Employer Health Benefits Survey: 2017, CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 43 California Employer Health Benefits Methodology The California Employer Health Benefits Survey is a joint product of the response bias, missing values within these variables were imputed using California Health Care Foundation (CHCF) and the National Opinion a hot-deck approach. Calculation of the weights follows a common Research Center (NORC). The survey was designed and analyzed by approach. First, the basic weight is determined, followed by a survey researchers at NORC and administered by National Research (NR). The nonresponse adjustment. Next, the weights are trimmed to reduce the ABOUT THIS SERIES findings are based on a random sample of 688 interviews with employee influence of weight outliers. Finally, a post-stratification adjustment is The California Health Care Almanac is an online benefit managers in private firms in California. NR conducted interviews applied. clearinghouse for data and analysis examining from August to December 2017. As with prior years, the sample of firms the state’s health care system. It focuses on issues All statistical tests in this report compare either changes over time, was drawn from the Dun & Bradstreet list of private employers with three of quality, affordability, insurance coverage and a plan-specific estimate with an overall estimate, or subcategories or more workers. The margin of error for responses among all employers versus all other firms (e.g., firms with three to nine workers vs. all other the uninsured, and the financial health of the is +/– 3.8%, for responses among employers with 3 to 199 workers it is firms). Tests include t-tests and chi-square tests, and significance was system with the goal of supporting thoughtful +/– 5.0%, and among employers with 200 or more workers it is +/– 5.9%. determined at p < .05 level. Due to the complex nature of the design, planning and effective decisionmaking. Learn Some exhibits do not sum to 100% due to rounding effects. standard errors are calculated in SUDAAN. more at www.chcf.org/almanac. The Kaiser Family Foundation (KFF) sponsored this survey of California An important note about the methodology. Rates of change for total employers from 2000 to 2003. A similar employer survey was also premiums, for worker or employer contributions to premiums, and other AU T H O R S conducted in 1999 in California, in conjunction with the Center for variables calculated by comparing dollar values in this report to data Heidi Whitmore, Principal Research Scientist Health and Public Policy Studies at the University of California, Berkeley. reported in past CHCF or KFF publications should be used with caution, The Health Research and Educational Trust (HRET) collaborated on Jon Gabel, Senior Fellow due to both the survey’s sampling design and the way in which plan these surveys from 1999 to 2004. The Center for Studying Health System information is collected. Rates calculated in this fashion not only reflect a NORC at the University of Chicago Change collaborated on these surveys from 2005 to 2006. change in the dollar values but also a change in enrollment distribution, This survey instrument is similar to a national employer survey thus creating a variable enrollment estimate. However, rates of change conducted annually by the KFF and HRET. The US results in this study in premiums are collected directly as a question in the California survey. are either from the published reports, or in a few cases, from author This rate of change holds enrollment constant between the current calculations from the survey’s public use files. A full analysis of the year and the previous year, thus creating a fixed enrollment estimate. US data set is available on the KFF website at www.kff.org. Both the Because the survey does not collect information on the rate of change F O R M O R E I N F O R M AT I O N California and US surveys asked questions about health maintenance in other variables, additional rates are not reported. The national survey organizations (HMOs), preferred provider organizations (PPOs), point- conducted by Kaiser/HRET, however, stopped collecting directly rates California Health Care Foundation of-service (POS) plans, and high-deductible health plans with a savings of change in premiums in its 2008 survey. Therefore, the rate of change 1438 Webster Street, Suite 400 option (HDHP/SOs). Conventional (fee-for-service) plans are generally in total premiums in the US provided in this report uses a variable Oakland, CA 94612 excluded from the plan type analyses because they compose a small enrollment estimate. 510.238.1040 share of the California market. Please note that due to a change in the post-stratification methods www.chcf.org Many variables with missing information were identified as needing applied in 2003, the survey data published in this report may vary slightly complete information within the database. To control for item non­ from reports published prior to 2003. CALIFORNIA HEALTH CARE FOUNDATION 44