Employer premiums on health care plans rose higher thisyear than they have in the past five years – but employers areresponding by continuing to pass the costs onto workers and also reducing theirprescription drug coverage, according to the2017 UnitedBenefit Advisors Health Plan Survey.

Premium renewal rates for employer-sponsored health insurancerose an average of 6.6 percent -- a significant increase from thefive-year average increase of 5.6 percent, according to responsesfrom 20,099 health plans and 11,221 employers.

On the high end, Connecticut saw a record 24 percent increase inpremiums in 2017, up to $655 from $530 in 2016; and New York saw alarge increase of 14 percent, up to $712 from $624. However, somestates saw decreases in premiums, such as Arizona and Washington,which saw 2 percent and 10 percent decreases, respectively.

For all employer-sponsored plans, average employee premiums forsingle coverage rose 4.5 percent, up to $532 from $509 in 2016.Average employee premiums for family coverage rose 3 percent, up to$1,272 from $1,236.

Average annual total costs per employee increased from $9,727 to$9,935. However, the employee share of total costs rose 5 percentfrom $3,378 to $3,550, while the employer's share rose less than 1percent, from $6,350 to $6,401.

“Premiums have been holding relatively steady the last fewyears, and while this year’s increases are not astronomical, theirdeparture from the trend does warrant attention,” says UBA’spresident Peter Weber. “To mitigate these rising costs, employersare shifting more premium onto employees, offering more lower-costconsumer directed health plans and health maintenance organizationplans, increasing out-of-network deductibles and out-of-pocketmaximums, and leveraging continued extensions on the ability to‘grandmother.’”

Median in-network deductibles for singles and families acrossall plans remain steady at $2,000 and $4,000, respectively. Singleout-of-network median deductibles saw a 13 percent increase in2016, and a 17.6 percent increase in 2017, from $3,400 to $4,000.Both singles and families are facing continued increases in medianin-network out-of-pocket maximums (up by $560 and $1,000,respectively, to $5,000 and $10,000).

Employers are also defraying health care costs even further by“dramatically” shifting prescription drug costs to employees in theform of increasing the number of coverage tiers and addingcoinsurance, compared to copays, Weber says.

Almost three-quarters (72.6 percent) of prescription drug plansnow have four or more tiers, while 27.4 percent have three or fewertiers. Nearly a third (32 percent) of all plans have six tiers, upfrom 2 percent a year ago.

More and more employers are also beginning to self-fund healthplans in an effort to reduce costs. The number of employers usingself-funding grew 48 percent for employers with 25 to 49 employeesin 2017 (5.8 percent of plans), and 13.4 percent for employers with50 to 99 employees (9.3 percent of plans).

Overall, 12.8 percent of all plans are self-funded, up from 12.5percent in 2016, while almost two-thirds (60.9 percent) of alllarge employer (1,000+ employees) plans are self-funded.

“Self-funding has always been an attractive option for largegroups, but we see self-funding becoming increasingly desirable toall employers as a way to avoid various cost and compliance aspectsof health care reform,” Weber says. “For small employers withhealthy populations, self-funding may be particularly attractivesince fully insured community-rated plans under the ACA don’t givethem any credit for a healthy group.”