CALIFORNIA Health Care Almanac AUGUST 2021 California Employer Health Benefits: Are Workers Covered? California Employer Health Benefits Executive Summary Executive Summary Between 2000 and 2020, the percentage of employers offering health benefits declined in California CONTENTS from 69% to 60%. Workers are shouldering more of the cost for their health benefits, paying both a larger share of premiums and higher deductibles and copays. The prevalance of plans with deductibles Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 over $1,000 increased from 6% in 2006 to 54% in 2020, largely due to enrollment shifts into different Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 plan types. Cost of Health Insurance . . . . . . . . . . . . . . . . . . . . . . 13 California Employer Health Benefits: Are Workers Covered? presents data compiled from the 2020 California Employer Health Benefits Survey. Benefits and Cost Sharing . . . . . . . . . . . . . . . . . . . . . . . 21 KEY FINDINGS FROM THE 2020 SURVEY: Employer Views and Practices . . . . . . . . . . . . . . . . . . . . 35 • Forty-five percent of Californians pay more than 25% of the premium for single coverage, compared to 21% Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 of workers nationally. • The average monthly health insurance premium in California, including the employer contribution, was $653 for single coverage and $1,717 for family coverage. • Seventy-two percent of workers in small firms (3 to 199 workers) faced an annual deductible of at least $1,000 for single coverage, compared to 48% of workers in larger firms. • About one in eight firms (13%) that employ many workers with lower wages (those earning $25,000 or less) offered health coverage to employees in 2020. • In the past year, 14% of California firms reported that they increased cost sharing for their workers. • Twenty-four percent of California firms stated they are "very likely" to increase the amount workers pay for premiums in 2022. Note: See the current and past editions of California Employer Health Benefits at www.chcf.org/collection/california-employer-health-benefits-almanac. CALIFORNIA HEALTH CARE FOUNDATION 2 California Employer Health Benefits Employers, Workers, and Covered Workers, by Firm Size Overview California vs. United States, 2020 In 2020, California firms with 3 to NUMBER OF WORKERS ■ 3–9 ■ 10–49 ■ 50–199 ■ 200–999 ■ 1,000+ 49 workers accounted for 92% of all employers, but just 27% of all Employers* 2% 1% workers, and 16% of workers with CA 61% 31% 6% health coverage, similar to national firms. US 59% 33% 6% 1%<1% Workers CA 9% 18% 14% 12% 46% US 7% 16% 13% 14% 49% Covered Workers CA 4% 12% 16% 13% 54% US 4% 11% 14% 16% 56% * Estimates are statistically different between California and US. Note: Segments may not total 100% due to rounding. Sources: California Employer Health Benefits Survey (2020), CHCF/NORC; and author analysis of Employer Health Benefits Survey public use file (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 3 California Employer Health Benefits Employers Offering Health Benefits Coverage California vs. the United States, 2000 to 2020 The percentage of California California United States employers offering health insurance in 2020 (60%) was similar to the overall US rate of 56%. The offer rate among California firms has been fairly stable 73% 70% 71% 70% 71% 71% 70% 69%* since 2012. 69% 67% 67% 63%* 68% 68% 60% 61% 60% 66% 66% 69%* 63% 63% 58% 57% 55% 56% 60% 60% 61% 59% 59% 60%* 61% 57% 57% 56% 57% 57% 56% 55% 53% 2000 * Estimates 2001 2002 are statistically different2003 2004 from the 2005 previous year2006 shown. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: The survey was not conducted in California in 2019. Sources: California Employer Health Benefits Survey (2007–18 and 2020), CHCF/NORC; California Employer Health Benefits Survey (2005–6), CHCF/HSC; California Employer Health Benefits Survey (2004), CHCF/HRET; California Employer Health Benefits Survey (2000–3), Kaiser/HRET; Employer Health Benefits Survey (2018–20), KFF; and Employer Health Benefits Survey (2000–17), Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 4 California Employer Health Benefits Employers Offering Health Benefits, by Firm Characteristics Coverage California, 2020 Whether a firm offers health insurance All Firms coverage to its employees varies 60% widely by firm characteristics. Firms Many Workers with Lower Wages* that employ many workers with 13% lower wages or part-time workers were much less likely to offer health Fewer Workers with Lower Wages* insurance than those that employ 64% fewer of these workers. Most Many Part-Time Workers* companies with union workers (92%) 31% offered coverage. Fewer Part-Time Workers* 66% At Least Some Union Workers 92% No Union Workers 58% * Estimate is statistically different from all other firms. Notes: Many workers with lower wages firms are those with 35% or more of workers earning $25,000 or less per year. Fewer workers with lower wages firms 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 (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 5 California Employer Health Benefits Employers Offering Health Benefits, by Firm Size Coverage California vs. United States, 2020 About half (52%) of California's ■ California ■ United States smallest firms (three to nine workers) offered coverage in 2020, while the 98% 100% 99% 100% 99% vast majority of larger firms did so. 92% Offer rates for California employers were similar to national figures. 60% 63% 61% 56% 52% 48% All Firm Sizes 3 to 9 10 to 49 50 to 199* 200 to 999 1,000+ Number of Workers * Estimates are statistically different between California and US. Sources: California Employer Health Benefits Survey (2020), CHCF/NORC; and author analysis of Employer Health Benefits Survey public use dataset (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 6 California Employer Health Benefits Employee Eligibility, Take-Up Rates, and Coverage Coverage California vs. United States, 2020 Not all employees are eligible for health insurance offered by their firm, Eligible Workers Who… and not all who are eligible elect to participate. Eighty-three percent of 83% 82% Take Up Coverage 78% people working in California firms 75% offering coverage were eligible for health benefits in 2020. Of those 63% 64% eligible, 75% elected to enroll, ■ California resulting in a 63% coverage rate. ■ United States Eligible Workers Covered Workers Note: Tests found no statistically different estimates between California and US. Sources: California Employer Health Benefits Survey (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 7 California Employer Health Benefits Worker Coverage Rates Among Firms Offering Health Benefits Coverage by Firm Size, California, 2012 to 2020, Selected Years Insurance coverage rates among All Firms ■ 2020 California employers offering health % 63% ■ 2018 benefits have been fairly stable since ■ 2016 7% 62% ■ 2014 2012. Large and small firms had 68% 62% ■ 2012 64% similar coverage rates. 66% Small Firms (3 to 199 workers) 65% 65% 63% 62% 63% Large Firms (200+ workers) 61% 62% 62% 65% 68% Note: Tests found no statistically different estimates from previous year shown within firm size. Source: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 8 California Employer Health Benefits Covered Worker Health Plan Options, by Type Coverage California vs. United States, 2020 Covered workers in California were ■ California ■ United States more likely to have an HMO option 74% than workers nationally. Sixty- two percent of covered workers 62% in California had an HMO option, 56% compared to only 11% of covered 54% workers nationally. 31% 27% 26% 3% 11% <1% Conventional* POS HDHP/SO* PPO HMO* * Estimates are statistically different between California and US. Notes: POS is point-of-service plan. HDHP/SO is 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 (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 9 California Employer Health Benefits Enrollment of Covered Workers, by Plan Type Coverage California vs. United States, 2012 to 2020, Selected Years The proportion of covered workers ■ Conventional ■ HMO ■ PPO ■ POS ■ HDHP/SO in HMO plans in California has fallen California from 55% in 2012 to 46% in 2020. 2012 55% 33% 7% 5% HMO enrollment is still dramatically higher in California relative to the 2014 54% 29% 8% 10% United States as a whole. 2016 <1% 51% 31% 5% 13% 2018 45% 28% 13% 15% 2020 <1% 46% 30% 14% 10% United States 2012 <1% 16% 56% 9% 19% 2014 <1% 13% 58% 8% 20% 2016 <1% 15% 48% 9% 29% 2018 <1% 16% 49% 6% 29% 2020 1% 13% 47% 8% 31% Notes: POS is point-of-service plan. HDHP/SO is 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. Conventional plan enrollment in both California and the US was 1% or less in 2012–20. Sources: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC; author analysis of data from Employer Health Benefits Survey public use files (2018–20), KFF; and Employer Health Benefits Survey public use files (2012–17), Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 10 California Employer Health Benefits Firms Offering a High-Deductible Plan, by Firm Size Coverage California, 2020 Compared to other plan types, HDHPs typically expose workers to higher ■ All Firms ■ Small Firms ■ Large Firms (3–199 workers) (200+ workers) out-of-pocket costs. Seventy-three 82% percent of all California firms offered a high-deductible health plan (HDHP) 73% 72% in 2020. Of these firms, 8% offered an HDHP with a health reimbursement 52% arrangement (HRA), while 41% offered an HDHP with a health savings 41% 40% account (HSA). 17% 8% 7% Offer High-Deductible Plan HDHP with HRA HDHP with HSA 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, which can be used to help pay for IRS-approved health care expenses. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 11 California Employer Health Benefits Workers in Self-Insured Plans, by Plan Type Coverage California vs. United States, 2020 Twenty-four percent of covered ■ California ■ United States workers in California were enrolled 75% in a partly or completely self-insured 72% plan in 2020, compared with 67% 67% nationally. The difference between the state and national figures is likely 55% associated with California's high HMO enrollment, since HMOs are less likely 43% than other plans to be self-insured. 38% 24% 13% 11% All Plans* HMO* POS HDHP/SO PPO * Estimate is statistically different between California and US. Notes: Self-insured plans are plans for which an employer assumes some or most of the responsibility for paying health care claims rather than buying coverage from an insurer. POS is point-of-service plan. HDHP/SO is high-deductible plan with a savings option. HDHPs have a deductible of at least $1,000 for single coverage and at least $2,000 for family coverage. POS was not reported for US due to small sample size. Sources: California Employer Health Benefits Survey (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 12 California Employer Health Benefits Average Annual Premiums, by Plan Type Cost of Health Insurance Single vs. Family Coverage, California, 2020 In California, average annual Single premiums were $7,838 for single All Plans $7,838 coverage and $20,602 for family coverage. Annual PPO premiums were HDHP/SO $6,736* the highest of all plan types. HMO $7,935 POS $7,053* PPO $8,413* Family All Plans $20,602 HDHP/SO $22,696* HMO $18,010 POS $19,676 PPO $24,311* * Estimate is statistically different from all-plans figure. Notes: POS is point-of-service plan. HDHP/SO is 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. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 13 California Employer Health Benefits Average Increase in Annual Premiums, by Plan Type Cost of Health Insurance California, 2020 In 2020, overall premiums increased by 3.5% from the previous year. 5.9% PPO plans experienced the smallest increase. 5.2% 3.8% 3.5% 1.4% All Plans HMO PPO HDHP/SO POS Notes: Tests found no significantly different estimates between All Plans and other plan types. POS is point-of-service plan. HDHP/SO is 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. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 14 California Employer Health Benefits Average Monthly Premiums, by Plan Type Cost of Health Insurance California vs. United States, 2020 Overall average monthly premiums Single Coverage $653 for single and family coverage were All Plans $623 ■ California similar in California and nationwide. $661 ■ United States HMO $607 PPO $701 $657 POS $588 $624 HDHP/SO $561 $574 Family Coverage All Plans $1,717 $1,779 HMO $1,501 $1,734 PPO $2,026 $1,854 POS $1,640 $1,706 HDHP/SO $1,891 $1,697 Notes: Tests found no statistically different estimates between California and the US. POS is point-of-service plan. HDHP/SO is 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 (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 15 California Employer Health Benefits Average Monthly HMO Premiums, Single Coverage Cost of Health Insurance California vs. United States, 2000 to 2020 From 2000 to 2010, California's average monthly HMO premium for California United States single coverage stayed below that of the US, except in 2006. In 2011, it $661 exceeded the national rate and has often done so since. $607 $187 $163 2000*2001*2002*2003*2004*2005* 2006 2007*2008* 2009 2010 2011*2012* 2013 2014 2015 2016 2017 2018 2019 2020 * 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 is collected). The survey was not conducted in California in 2019. Sources: California Employer Health Benefits Survey (2007–18 and 2020), CHCF/NORC; California Employer Health Benefits Survey (2005–6), CHCF/HSC; California Employer Health Benefits Survey (2004), CHCF/HRET; California Employer Health Benefits Survey (2000–3), KFF/HRET; Employer Health Benefits Survey (2018–20), KFF; and Employer Health Benefits Survey (2000–17), Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 16 California Employer Health Benefits Annual Worker and Employer Premium Contributions Cost of Health Insurance California vs. United States, 2020 California workers contributed an average of $1,950 annually for ■ Worker ■ Employer single coverage and $6,723 for Single Coverage family coverage in 2020. Worker CA $1,950* $5,888* $7,838* contributions to single and family premiums were higher in California US $1,243* $6,227* $7,470* than nationally. Family Coverage CA $6,723* $13,880* $20,602* US $5,588* $15,754* $21,342* * Estimates are statistically different between California and US within coverage type. Note: Segments may not add to totals due to rounding. Sources: California Employer Health Benefits Survey (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 17 California Employer Health Benefits Workers' Share of Premium Cost of Health Insurance California vs. United States, 2020 Distribution of workers' share of ■ No Contribution ■ 1%–25% ■ 26%–50% ■ >50% premium varied between California and the nation. Twenty percent of Single Coverage California workers paid more than half CA 7% 48% 43% of the premium for family coverage, 2% compared to 11% of workers US 11% 69% 20% nationwide. 1% Family Coverage CA 35% 45% 20% <1% US 54% 32% 11% 4% Notes: Tests found no statistically different estimates between California and the US. Segments may not add to 100% due to rounding. Sources: California Employer Health Benefits Survey (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 18 California Employer Health Benefits Workers' Share of Premium, by Firm Size Cost of Health Insurance California, 2020 Workers' share of premium vary by ■ No Contribution ■ 1%–25% ■ 26%–50% ■ >50% firm size for both single and family coverage, with those in small firms Single Coverage generally paying more. For family All Firms 7% 48% 43% coverage, 23% of workers in small 2% Small Firms* 43% 50% 5% firms paid more than half of the (3–199 workers) 3% premium, compared to 19% of Large Firms* (200+ workers) 9% 50% 40% workers in large firms. Family Coverage All Firms 35% 45% 20% <1% Small Firms* (3–199 workers) 23% 53% 23% 1% Large Firms* (200+ workers) 41% 41% 19% * 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 (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 19 California Employer Health Benefits Workers' Share of Premium, Single and Family Coverage Cost of Health Insurance California, 2009 to 2020 California workers paid an average of Single Family 20% of the total premium for single coverage and 33% for family coverage in 2020. The corresponding annual premium contributions were $1,950 and $6,723 for single and family (not shown). 33%* 33% 27% 27% 26%* 26% 29% 26% 27% 27% 25% 22%* 17% 17% 17% 20% 15% 16%* 16% 13% 14% 12% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 * Estimates are significantly different from previous year shown. Note: The survey was not conducted in 2019. Source: California Employer Health Benefits Survey (2009–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 20 California Employer Health Benefits Workers with Primary Care Office Visit Copayments Benefits and Cost Sharing California, 2012 to 2020, Selected Years About 86% of workers in California PER VISIT COPAY ■ $5 ■ $10 ■ $15 ■ $20 ■ $25 ■ $30 ■ Other had a copay for primary care office visits (not shown). A copay of $20 2012 18% 20% 33% 13% 10% 6% was the most common in 2020. <1% 2014 10% 19% 42% 9% 11% 8% 1% 2016 8% 12% 39% 15% 14% 10% 1% 2018 13% 9% 37% 18% 10% 13% <1% 2020 15% 41% 11% 11% 20% <1% 2% Notes: Tests found no significantly different estimates between years shown. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 21 California Employer Health Benefits Workers with Primary Care Office Visit Copayments, by Plan Type Benefits and Cost Sharing California, 2012 to 2020, Selected Years Distribution of copayments for ■ $5 ■ $10 ■ $15 ■ $20 ■ $25 ■ $30 ■ Other primary care office visits for workers with HMO or PPO coverage has shifted HMO 2012 23% 24% 30% 10% 8% 4% since 2012, with a smaller percentage 2014 1% 5% 20% 46% 10% 10% 9% of workers having copayments of $5 2016 1% 11% 9% 42% 15% 13% 9% or $10. 2018 20% 13% 30% 19% 9% 8% 2020 <1% 1% 21% 51% 10% 9% 8% PPO (in-network) 2012 13% 10% 37% 12% 8% 21% 2014 22% 11% 34% 9% 10% 14% 2016 9% 16% 30% 19% 15% 11% 2018 4% 7% 36% 22% 15% 16% 2020 3% 15% 40% 9% 8% 24% POS (in-network) 2012 2% 15% 36% 9% 23% 15% 2014 3% 17% 33% 12% 26% 9% 2016 3% 14% 24% 20% 22% 17% 2018 3% 7% 57% 7% 6% 20% 2020 1% 2% 7% 9% 18% 16% 46% Notes: Distributions are statistically similar from previous year shown. POS is point-of-service plan. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 22 California Employer Health Benefits Workers with Annual Deductible, Single Coverage Benefits and Cost Sharing by Plan Type, California vs. United States, 2020 In 2020, 47% of workers with single ■ California ■ United States coverage had a deductible in California $2,602 $2,303 compared to 83% in the nation as a 100% 100% whole. Those enrolled in HMO and $1,644 $716 $1,204 POS plans in California were less likely $1,714 to have a deductible than enrollees 83% 79% 82% $1,472 76% nationwide. $1,201 63% $1,298 47% 49% $2,436 15% 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 is point-of-service plan. HDHP/SO is 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 (2020), CHCF/NORC; and Employer Health Benefits Survey (2020), KFF. CALIFORNIA HEALTH CARE FOUNDATION 23 California Employer Health Benefits Workers with a Large Deductible ($1,000+), Single Coverage Benefits and Cost Sharing California vs. United States, 2006 to 2020 About half of California workers California United States with single coverage had an annual 58% 57% deductible of $1,000 or more, 55% 51% 51% compared to 57% nationwide. The 54% share of California workers with a 46% large deductible increased from 6% in 41% 38% 2006 to 54% in 2020. 34% 31% 27%* 31% 22%* 25% 25% 18%* 22% 20% 10% 12%* 17% 14% 13% 14% 12% 10% 9% 6% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 * Estimate is statistically different from previous year shown. Note: The survey was not conducted in California in 2019. Sources: California Employer Health Benefits Survey (2007–18 and 2020), CHCF/NORC; California Employer Health Benefits Survey (2006), CHCF/HSC; Employer Health Benefits Survey (2018–20), KFF; and Employer Health Benefits Survey (2006–17), Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 24 California Employer Health Benefits Workers with a Large Deductible ($1,000+), Single Coverage Benefits and Cost Sharing by Firm Size, California, 2006 to 2020 Large-deductible ($1,000+) plans All Firms Small Firms (3–199 workers) Large Firms (200+ workers) were more common among workers 72% in smaller firms. The percentage of workers in both small and large firms with large-deductible plans was 54% much higher in 2020 than in 2018. 49% 43% 41% 41% 48% 32% 32% 31% 27% 27% 26% 25% 25% 21%* 22% 20% 7% 14% 14% 14% 17% 21% 6% 11% 10% 12% 13% 17% 5% 9% 14% 15% 11% 10% 9% 8% 5% 6% 5% 5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 * Estimate is statistically different from previous year shown same-sized firms. Note: The survey was not conducted in 2019. Sources: California Employer Health Benefits Survey (2007–18 and 2020), CHCF/NORC; and California Employer Health Benefits Survey (2006), CHCF/HSC. CALIFORNIA HEALTH CARE FOUNDATION 25 California Employer Health Benefits Deductibles for Single Coverage, by Plan Type Benefits and Cost Sharing California, 2020 Among the 47% of California workers ■ <$500 ■ $500–$999 ■ $1,000–$1,999 ■ $2,000+ who faced a deductible for single coverage (not shown), 28% had a deductible of $2,000 or more. All Plans 25% 12% 35% 28% HMO 87% 6% 6% 1% PPO* (in-network) 47% 36% 7% 9% POS (in-network) 49% 39% 10% 2% HDHP/SO* 41% 58% * Distribution is statistically different from All Plans. Notes: Data based on workers with a deductible. POS is point-of-service plan. HDHP/SO is 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 (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 26 California Employer Health Benefits Deductibles for Single Coverage Benefits and Cost Sharing All Plans, 2012 to 2020, Selected Years The distribution of deductible amounts has changed since 2012. Among ■ <$500 ■ $500–$999 ■ $1,000–$1,999 ■ $2,000+ workers with single coverage and a deductible, the percentage with a 2012 52% 19% 16% 13% deductible of $2,000 or more doubled between 2012 and 2020. During the 2014* 29% 19% 22% 30% same time, the percentage of workers with a deductible of less than $500 decreased from 52% to 25%. 2016 24% 26% 31% 20% 2018 23% 16% 24% 38% 2020 25% 12% 35% 28% * Distribution is statistically different from previous year shown. Notes: Data based on workers with a deductible. Includes in-network use only. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 27 California Employer Health Benefits Deductibles for Family Coverage, by Plan Type Benefits and Cost Sharing California, 2020 Among California workers with a family deductible in 2020, 70% faced ■ <$500 ■ $500–$999 ■ $1,000–$1,999 ■ $2,000+ a deductible of $2,000 or more. All Plans 13% 14% 70% 3% HMO 8% 8% 84% PPO* 18% 14% 25% 43% POS 26% 70% 1% 3% HDHP/SO 100% * Distribution is statistically different from All Plans. Notes: Data based on workers with a deductible. POS is point-of-service plan. HDHP/SO is 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 (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 28 California Employer Health Benefits Deductibles for Family Coverage Benefits and Cost Sharing All Plans, 2012 to 2020, Selected Years In 2020, 7 in 10 workers with an aggregate family deductible faced a ■ <$500 ■ $500–$999 ■ $1,000–$1,999 ■ $2,000+ deductible of $2,000 or more. 2012 23% 32% 15% 31% 2014* 12% 18% 12% 58% 2016 8% 22% 66% 4% 2018 5% 20% 16% 58% 2020 13% 14% 70% 3% * Distribution is statistically different from previous year shown. Notes: Data based on workers with an aggregate family deductible. Workers who had a separate per-person deductible were not included. Includes in-network use only. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 29 California Employer Health Benefits Annual Out-of-Pocket Limits, Single Coverage Benefits and Cost Sharing by Plan Type, California, 2020 Out-of-pocket limits help limit costs ■ <$1,000 ■ $1,000–$1,499 ■ $1,500–$1,999 ■ $2,000–$2,499 for consumers and are capped by the ■ $2,500–$2,999 ■ $3,000+ ■ No Limit Affordable Care Act. While nearly all covered workers with single coverage All Plans 4% 17% 32% 4% 4% 32% 7% had an out-of-pocket limit, 32% had a limit of $3,000 or more. HMO 10% 58% 18% 7% 1% 3% 3% PPO* 8% 30% 5% 5% 44% 5% 3% POS 11% 4% 8% 60% 14% 1% 2% HDHP/SO* 39% 60% <1% <1% 1% * Distribution is statistically different from All Plans. Notes: POS is point-of-service plan. HDHP/SO is 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 (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 30 California Employer Health Benefits Annual Out-of-Pocket Limits, Family Coverage Benefits and Cost Sharing by Plan Type, California, 2020 Only 15% of California workers with ■ <$2,000 ■ $2,000–$2,999 ■ $3,000–$3,999 ■ $4,000–$4,999 family coverage had an annual out- ■ $5,000–$5,999 ■ $6,000+ ■ No Limit of-pocket limit of less than $2,000, while 31% had a limit of $6,000 or All Plans 15% 8% 33% 31% 6% more. Six percent of covered workers 3% 3% with family coverage had no out-of- HMO 9% 11% 53% 15% 8% pocket limit. 3% 3% PPO* 35% 8% 44% (in-network) 3% 4% 3% 4% POS 9% 5% 13% 61% 8% (in-network) 3%2% HDHP/SO* 9% 8% 82% <1% 1% * Distribution is statistically different from All Plans. Notes: POS is point-of-service plan. HDHP/SO is high-deductible plan with savings option. HDHPs have a deductible of $2,000 or more for family coverage. Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 31 California Employer Health Benefits Workers' Cost Sharing for Prescription Drugs Benefits and Cost Sharing California vs. United States, 2012 to 2020, Selected Years In 2020, 53% of California workers ■ One Tier ■ Two Tier ■ Three Tier ■ Four Tier ■ Other with coverage had a three- or four-tier California cost-sharing formula for prescription 2012 7% 37% 50% 4% 1% drugs, compared to 83% nationally. The share of California workers with 2014 5% 36% 42% 15% 2% four tiers has increased substantially 2016 5% 25% 45% 22% 3% over time, from 4% in 2012 to 20% in 2018 4% 29% 43% 18% 6% 2020. 2020 2% 37% 33% 20% 8% United States 2012 6% 10% 63% 14% 6% 2014 5% 10% 60% 20% 5% 2016 7% 5% 52% 32% 4% 2018 4% 4% 37% 51% 3% 2020 7% 6% 35% 48% 4% Notes: Tests found no significantly different estimates between years shown. 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 for California includes "no cost sharing" and "none of the above"; Other for US includes "other" and "no cost sharing after the deductible is met." 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 (2012–18 and 2020), CHCF/NORC; author analysis of data from Employer Health Benefits Survey public use files (2018–20), KFF; and Employer Health Benefits Survey public use files (2012–17), Kaiser/HRET. CALIFORNIA HEALTH CARE FOUNDATION 32 California Employer Health Benefits Average Prescription Drug Copayments, by Drug Type Benefits and Cost Sharing California, 2012 to 2020, Selected Years Among firms with four or more tiers Generic Drugs ■ 2012 of prescription cost sharing, average $9.79 ■ 2014 copayments for generic drugs were a $12.11 ■ 2016 ■ 2018 third of what they were for preferred $11.93 ■ 2020 drugs, and a fifth of what they were $10.64 $9.91 for nonpreferred drugs. Preferred Drugs $25.80 $30.82 $32.05 $29.01 $29.73 Nonpreferred Drugs $47.62 $45.67 $52.79 $47.94 $53.36 Notes: Tests found no significantly different estimates between years shown. Data are shown for firms with four or more tiers. Preferred drugs are listed in a plan's formulary. Nonpreferred drugs are not listed in the formulary. Fourth-tier data are not shown due to small sample sizes. Source: California Employer Health Benefits Survey (2012–18 and 2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 33 California Employer Health Benefits Firms Covering Telemedicine and Retail Clinics Benefits and Cost Sharing Plans with Largest Enrollment, by Firm Size, California, 2020 Nearly 95% of large firms reported COVERAGE INCLUDES... that their health plan with the largest Telemedicine Includes Behavioral Health Visits enrollment offered coverage for 73% 93% telemedicine services, and nearly 75% 74% of these firms' plans with the largest 73% 80% 81% enrollment also included coverage for behavioral health telemedicine visits. About half of all firms reported that their plan with the largest enrollment ■ Small Firms (3–199 workers) 49% 48% 49% ■ Large Firms (200+ workers) covered care from a retail clinic. ■ All Firms Telemedicine Retail Clinic Note: Tests found no significant differences between small and large firms. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 34 California Employer Health Benefits Firms That Offered a Narrow Network Plan to Reduce Plan Costs Employer Views and Practices by Firm Size, California, 2020 Sixteen percent of small firms offered OFFERED A NARROW NETWORK PLAN (200+ workers) a narrow network plan in 2020 to reduce plan costs. ■ Yes ■ No ■ Don't Know All Firms 16% 77% 7% Small Firms* (1–199 workers) 16% 77% 8% Large Firms* (200+ workers) 20% 76% 4% * Difference is statistically different between small and large firms. Notes: A narrow network is one that limits the number of providers who can participate, or limits some services to certain facilities. These plans' networks are more restrictive than a standard HMO network. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 35 California Employer Health Benefits Firms That Eliminated Hospitals or Health Systems from Employer Views and Practices Provider Network to Reduce Plan Costs Three percent of firms eliminated by Firm Size, California, 2020 hospitals or health systems from ELIMINATED HOSPITALS OR HEALTH SYSTEMS provider networks to reduce plan costs. ■ Yes ■ No ■ Don't Know All Firms 90% 7% 3% Small Firms (1–199 workers) 90% 7% 3% Large Firms (200+ workers) 92% 6% 2% Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 36 California Employer Health Benefits Likelihood of Firms Making Changes in the Next Year Employer Views and Practices by Type of Change, California, 2020 Thirty-eight percent of California firms ■ Very ■ Somewhat ■ Not Too ■ Not at All ■ Don't Know reported they are very or somewhat likely to increase the amount that Increase the Amount Employees Pay for Premiums workers pay for premiums in the next 24% 14% 12% 48% year. Twenty-eight percent of firms 2% Increase the Amount Employees Pay for Deductibles stated that they are very or somewhat 14% 14% 12% 57% 4% likely to increase employees' Increase the Amount Employees Pay for Copays or Coinsurance deductibles, and 20% stated that they are very or somewhat likely to 10% 10% 15% 60% 4% increase what employees pay for Increase the Amount Employees Pay for Prescription Drugs copays or coinsurance. 12% 11% 15% 55% 7% Restrict Employee Eligibility for Coverage 4% 3% 90% 3% <1% Drop Coverage Entirely 5% 3% 91% 1% 1% Note: Segments may not add to 100% due to rounding. Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 37 California Employer Health Benefits Likelihood of Employers Making Selected Changes in the Next Year Employer Views and Practices by Firm Size, California, 2020 Compared to small firms, large firms ■ Very Likely ■ Somewhat Likely ■ Not Too Likely in California were more likely to report ■ Not at All Likely ■ Don't Know that they are very likely to increase the Increase Amount Employees Pay for Premiums amount employees pay for insurance Small Firm* 23% 15% 12% 48% premiums in the coming year. (3–199 workers) 2% Large Firm* (200+ workers) 38% 11% 13% 37% 1% Increase Amount Employees Pay for Copays or Coinsurance Small Firm (3–199 workers) 10% 10% 15% 60% 4% Large Firm (200+ workers) 8% 17% 70% 3% 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 (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 38 California Employer Health Benefits Firms That Made Changes in the Past Year Employer Views and Practices by Firm Size and Region, California, 2020 In the past year, 14% of California firms increased cost sharing for INCREASED MOVED BENEFIT REDUCED SCOPE INCENTIVES TO workers, 5% increased incentives INCREASED OPTIONS TO OF COVERED USE LESS COSTLY COST SHARING HRA OR HSA* BENEFITS PROVIDERS to use less costly providers, and 3% FIRM SIZE reduced covered benefits. Small Firms (3–199 workers) 14% 3% 3% 5% Large Firms 16% <1% 1% 1% • 200–999 workers 14% <1% 0% 1% • 1,000+ workers 20% <1% 4% 0% REGION Los Angeles 19% 0% 1% 2% San Francisco 22% 0% 9% 9% Rest of State 8% 5% 1% 4% All Firms 25% 39% 4% 7% * Asked only of firms offering a HDHP/SO. Notes: Tests found no significant difference between estimates shown. Los Angeles and San Francisco are defined as the metropolitan statistical area (MSA). Source: California Employer Health Benefits Survey (2020), CHCF/NORC. CALIFORNIA HEALTH CARE FOUNDATION 39 California Employer Health Benefits Methods The California Employer Health Benefits Survey is a joint product of the California Health Care Foundation (CHCF) and NORC at the University of Chicago. The survey was designed and analyzed by researchers at NORC, and administered by Davis Research (Davis). The findings are based on a random sample of 454 interviews with employee benefit managers in private firms in California. Davis conducted interviews from August to December 2020. The sample of firms was drawn from a Dynata database of private employers with three or more workers. Some exhibits do not sum ABOUT THIS SERIES to 100% due to rounding effects. The California Health Care Almanac is an online KFF (Kaiser Family Foundation) sponsored this survey of California employers from 2000 to 2003. A similar employer survey was also conducted in clearinghouse for data and analysis examining 1999 in California, in conjunction with the Center for Health and Public Policy Studies at the University of California, Berkeley. The Health Research the state's health care system. It focuses on issues and Educational Trust (HRET) collaborated on these surveys from 1999 to 2004. The Center for Studying Health System Change collaborated on these surveys from 2005 to 2006. of quality, affordability, insurance coverage and This survey instrument is similar to a national employer survey conducted annually by KFF. The US results in this study are either from the published the uninsured, and the financial health of the reports or from author calculations from the surveys' public use files. A full analysis of the US data set is available on KFF's website at www.kff.org. Both system with the goal of supporting thoughtful the California and US surveys asked questions about health maintenance organizations (HMOs), preferred provider organizations (PPOs), point-of- planning and effective decisionmaking. Learn service (POS) plans, and high-deductible health plans with a savings option (HDHP/SO). Conventional (fee-for-service) plans are generally excluded from the plan type analyses because they compose such a small share of the California market. more at www.chcf.org/almanac. Many variables with missing information were identified as needing complete information within the database. To control for item nonresponse bias, missing values within these variables were imputed using a hot-deck approach. Calculation of the weights follows a common approach. First, the AU T H O R S basic weight is determined, followed by a survey nonresponse adjustment. Next, the weights are trimmed in order to reduce the influence of weight Heidi Whitmore, Principal Research Scientist outliers. Finally, a post-stratification adjustment is applied. Jennifer Satorius, Senior Research Scientist All statistical tests in this chart pack compare either changes over time, a plan-specific estimate with an overall estimate, or subcategories versus all other firms (e.g., firms with three to nine workers vs. all other firms). Tests include t-tests and chi-square tests and significance was determined at p < NORC at the University of Chicago .05 level. A important note about the methodology. Rates of change for total premiums, for worker or employer contributions to premiums, and other variables calculated by comparing dollar values in this report to data reported in past CHCF or KFF publications should be used with caution, due to both the survey's sampling design and the way in which plan information is collected. Rates calculated in this fashion not only reflect a change in the dollar values but also a change in enrollment distribution, thus creating a variable enrollment estimate. However, rates of change in premiums are collected directly as a question in the California survey. This rate of change holds enrollment constant between the current year and the previous year thus creating a fixed enrollment estimate. Because the survey does not collect information on the rate of change in other variables, additional rates F O R M O R E I N F O R M AT I O N are not reported. The national survey conducted by Kaiser/HRET, however, stopped collecting directly rates of change in premiums in its 2008 survey. Therefore, the rate of change in total premiums in the US provided in this report uses a variable enrollment estimate. California Health Care Foundation Please note that due to a change in the post-stratification methods applied in 2003, the survey data published in this chart book may vary slightly 1438 Webster Street, Suite 400 from reports published prior to 2003. Oakland, CA 94612 510.238.1040 www.chcf.org CALIFORNIA HEALTH CARE FOUNDATION 40