While the new year feels like a fresh start for most work­ers, it’s also expect­ed to come with a spike in health insur­ance pre­mi­ums. Pre­mi­ums and deductibles have been steadi­ly increas­ing for years. The Kaiser Fam­i­ly Foun­da­tion (KFF) found that pre­mi­ums for a fam­i­ly rose 4% in 2021, accord­ing to a sur­vey focused on employ­er-spon­sored benefits.

The aver­age fam­i­ly pays $22,221 in pre­mi­ums, accord­ing to KFF. Work­ers con­tributed $5,969 toward their cov­er­age, while employ­ers paid the rest. In fact, since 2011 the aver­age fam­i­ly pre­mi­ums have increased 47%, which KFF found was more than wages (31%) and infla­tion (19%).

Not only is this a finan­cial hard­ship for Amer­i­can fam­i­lies, but it’s also drain­ing com­pa­nies that are strug­gling to main­tain employ­ee cov­er­age. To com­pli­cate the mat­ter, sev­er­al fed­er­al pro­grams pro­vid­ing sup­port for health­care are due to expire in 2022.

What to Expect in Healthcare Coverage

Ris­ing health­care pre­mi­ums are only part of the prob­lem. Deductibles are also sky­rock­et­ing. This is the amount work­ers have to pay before insur­ance kicks in and could make a huge finan­cial dif­fer­ence for fam­i­lies deal­ing with a seri­ous health issue.

The aver­age sin­gle deductible has dou­bled in the last decade to $1,669. For the more afford­able health­care plans, deductibles can be as high as $8,000. Over­all, 85% of the 155 Amer­i­cans with employ­er-spon­sored cov­er­age have a deductible.

Anoth­er sur­vey con­duct­ed by the Busi­ness Group on Health antic­i­pates health­care costs increas­ing by as much as 6% in 2022. Ana­lysts point­ed out that 2021 rates actu­al­ly flat­tened out slight­ly because many Amer­i­cans avoid­ed treat­ments dur­ing the pan­dem­ic. That’s expect­ed to end in 2022, which will dri­ve up prices. Of all employ­ers sur­veyed by BGOH, 94% expect­ed high­er med­ical costs because of delays in treatment.

Expiring Federal Support Programs

Fed­er­al leg­is­la­tion is also expir­ing in Jan­u­ary 2022. The Coro­n­avirus Aid, Relief, and Eco­nom­ic Secu­ri­ty (CARES) Act was one of the first bills signed in 2020 to help work­ers. It gave mon­ey to busi­ness­es, enhanced unem­ploy­ment pro­grams, and fund­ed hospitals.

One pro­vi­sion known as “safe har­bor” allowed high-deductible health plans to cov­er tele­health and remote care ser­vices at lit­tle to no cost. The CARES act expired on Decem­ber 31 and will now impact who is eli­gi­ble for tele­health services.

Anoth­er rule under the Amer­i­can Res­cue Plan Act (ARPA) in 2021 allowed for mid-year elec­tion changes for Depen­dent Care Reim­burse­ment Accounts (DCRA). This allowed work­ers to elect high­er lim­its to help pay for child­care pre-tax. The ARPA also expires on Decem­ber 31. If the new high­er exclu­sion lim­it is not extend­ed into 2022, fam­i­lies will have to con­tend with the pre­vi­ous $5,000 limit.

Around 30 mil­lion Amer­i­cans get their health cov­er­age from the Mar­ket­place, which was estab­lished by the Afford­able Care Act. With more enrollees and more avail­able plans in 2022, experts antic­i­pate a change in pre­mi­um sub­si­dies that could increase the total price peo­ple have to pay.

Navigating the Future

Regard­less of what employ­ers decide to do, HR depart­ments need to be proac­tive in guid­ing employ­ees through the process. Health­care deci­sions are com­plex and no com­pa­ny wants dis­grun­tled work­ers as a result of cut­ting or switch­ing plans with­out notice. Clear com­mu­ni­ca­tion and assis­tance are nec­es­sary to ensure a smooth tran­si­tion that is ben­e­fi­cial for everyone.

Com­pa­nies and HR depart­ments should also keep in mind that the ben­e­fits they ulti­mate­ly choose will define future recruit­ing. Health­care ben­e­fits are a top deci­sion-mak­ing fac­tor for most prospects.

By Mcken­zie Cassidy

Orig­i­nal­ly post­ed on HR Exchange Network