Colorado Employers Pay more for Health Insurance Coverage than National average

Colorado employers are paying more for insurance than employers in other states, according to results of the Lockton Benefit Group's ninth annual survey regarding health benefit costs and coverage.

Employers across the state reported health plan costs increasing for 2009 an average of 11.8 percent (before plan changes) over the prior year's rates. In September, the Kaiser Family Foundation's annual survey of employer health benefits found employer premiums for family coverage had increased 5 percent nationally.

More than 79 percent of the 173 Colorado companies surveyed by the Lockton Group plan to pass some portion of the rate increase to their employees through plan design changes and premium share increases. Thirty-six percent are evaluating whether to offer a wellness plan in 2010 as a further cost containment measure, about the same as last year's 38 percent.

"This survey is significant in that it demonstrates that the rate of increase in the cost of coverage in Colorado greatly exceeds the national average for 2010," said Bill Lindsay, president of Lockton in Denver, in releasing the survey results. "This makes it harder for Colorado employers to compete. Moreover, the resulting plan changes place Colorado workers at a greater disadvantage in terms of higher deductibles, out-of-pocket expense, and more significant premium cost-sharing than their counterparts nationally."

The kind of plans offered by Colorado employers is shifting, according to the Lockton survey. The percentage of employers offering an HMO plan decreased from 44 percent in 2008 to 32 percent in 2009. Most employers -- 91 percent -- are offering PPO plans with higher deductibles and higher out-of-pocket expenses, or a health savings account/high deductible health plan.

There has been a significant increase in the number of Colorado employers offering HSA/HDHPs over the prior year, with 27 percent of employers surveyed offering such plans, up from last year's 15 percent, and 24 percent considering offering one in 2010. In September, the Kaiser Foundation reported 12 percent of employers offering HSA plans nationally.

Perhaps in keeping with this trend, 41 percent of Colorado employers reported offering plans with deductibles of $1,000 or more, while 70 percent reported deductibles of $500 or more.

Eighty-five percent of the surveyed companies in Colorado indicated cost increases in health plans is a major or critical concern. The second greatest concern, at 73 percent, was federal/state legislation issues such as health-care reform.

The financial impact of health-care reform on employers is yet to be determined, but only 25 percent of surveyed employers responded that their senior management was very familiar with the various federal proposals being considered. Sixty-eight percent responded that they were somewhat familiar.

More than half of the participants in the survey were small businesses with fewer than 300 benefit-eligible employees; only 2 percent were from Northern Colorado.