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Group health plan costs up 4.4% in 2014; Aon Hewitt predicts bigger 2015 rise

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Group health plan costs up 4.4% in 2014; Aon Hewitt predicts bigger 2015 rise

Group health care plan costs increased on average by a relatively modest 4.4% in 2014, but bigger increases likely lay ahead, according to new research released by Aon Hewitt.

Group health care plan costs rose to an average of $10,717 per employee in 2014, according to an analysis released Thursday by Lincolnshire, Ill.-based Aon Hewitt. Costs include employer and employee premium contributions, but not employee out-of-pocket costs, such as copayments and coinsurance.

Other findings include:

• The average employee premium contribution for coverage in 2014 was $2,487, up 5.6% from 2013.

• Employees' out-of-pocket costs averaged $2,295 in 2014, up 14.5% from the prior year.

• By plan design, premium costs rose the most for point-of-service plans where costs in 2014 increased by an average of 5.5% to $11,711 per employee.

Aon Hewitt consultants are projecting, due to an improving economy, bigger cost increases for 2015: they project cost increases to average 5.5% in 2015, up from this year's 4.4% average increase and 3.3% in 2013.

“Over the past few years, the overall economic situation kept consumer spending on discretionary items — including health care — down, and we observed a lower rate of premium increases,” Tim Nimmer, Aon Hewitt's chief health care actuary in Denver said in a statement.

“Now, with employment rates stabilizing, individuals are feeling more secure about their financial situation and have been willing to re-engage in using the health care system. As these utilization rates increase, we expect to see health care cost increases follow,” Mr. Nimmer added.

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