How these employees pay nothing for their insurance premiums : NPR

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Healthcare

How has the price changed since the pandemic began?

Healthcare in the US is the most expensive in the developed world, and it's getting worse. The average annual premium for an employer-based health plan for a family of four was more than $25,500 last year, according to Health Policy. non-profit organization KFF. Of that average, employers contributed about $19,200 and employees contributed about $6,300.

Total premium volume has increased by more than 24% since 2019. sharp growth expected next year.

Why did the price increase?

Commercial companies, including drug manufacturers, pharmacy benefit managers, hospitals and insurance companies, collectively increased spending access to health care in the United States.

Drug makers are developing more effective drugs, including GLP-1 weight loss drugs and cancer treatments, but they are charging high prices for them. More people are returning to the doctor after the pandemic prevented them from doing so, driving up demand and prices. AND many insurance companies and other commercial enterprises in the healthcare system merged or consolidatedoften allowing the remaining businesses raise prices for your services.

But here's an unlikely solution for some American workers.

Some 154 million people in the United States receive health insurance through their employer, and many could see payroll deductions rise sharply next year. from 6% to 7% on average.

Employers do not have much control over these costs. But they do control how much they pass on to their workers—and across the country, some employers, large and small, have decided not to make their workers pay up front.

Boston Consulting Group, for example, covers all insurance premiums for about 10,000 of its U.S. employees and their dependents, meaning those workers don't have money taken out of their paychecks for premiums.

“Healthy employees make for a productive workforce and a place where our teams want to come to work every day,” says Alicia Pittman, BCG's chief people officer.

Between employees and their families, BCG pays full premiums for approximately 20,000 people. That would require a “large investment,” Pittman says, declining to specify the size.

But such investments can have big benefits for employers, she and other NPR executives say. Offering zero deductible health insurance helps recruit new employees and keep turnover low.

It also helps workers focus on their jobs instead of being distracted by the costs and frustrations of the U.S. healthcare system.

Some smaller employers and nonprofit organizations also provide premium-free health care.

It is rare, but not uncommon, for companies to provide zero-deductible health insurance to their employees. About 12% of large employers offer at least one health insurance plan with no upfront coverage for the individual employee, according to benefits consultant Mercer. (However, only 2% cover employees' dependents at no cost.)

But it's not just large commercial companies that offer some form of zero-premium health insurance. Some nonprofits, small businesses and startups are doing the same, according to interviews NPR conducted with executives and employees of several employers over the past few weeks.

“Health care is one of those non-negotiable issues,” Oliver says. Kharraz, CEO of Zocdoc, which makes scheduling software that people can use to make doctor's appointments online.

Obtaining health care in the United States, of course, involves many costs beyond just premiums: many low-premium plans may include high deductibles, copays, or other forms of “cost sharing.”

And Zocdoc does not cover all of the health insurance it provides to employees. It offers multiple plans, and people who choose the zero-deductible plan must pay a higher deductible, although the company does contribute to a health savings account to cover part of it.

“It's definitely an increasing cost,” Kharraz says. “But we think it’s our job to make sure the company is healthy enough that we can afford it.”

This is something startup founder Ryan Close was determined to provide to his employees from the very beginning. He and his family moved to Chicago from Canada in 2019—and when one of them first got sick and Close needed a prescription, he woke up with a start.

“It was like, 'Wow… this is a wake-up call. And it’s not cheap,” he says.

Close is the founder and CEO of Chicago startup Bartesian. The company sells a home cocktail maker and pods for it—similar to a Keurig or Nespresso for spirits. A few years into the pandemic, he had a blockbuster hit and raised $40 million from investors (including Chicago Cubs chairman Tom Ricketts and the Suntory liquor conglomerate, which owns Jim Beam).

Close now spends some of that money on his 30 employees. Bartesian covers all medical, dental and vision benefits for its employees and their families. He also contributes $1,000 annually to his flexible spending accounts.

There are definitely trade-offs to this, including rising costs as Barthesian increases and healthcare prices rise. Meanwhile, there are tradeoffs for employees: The company doesn't offer some other basic employee benefits, including a formal parental leave policy.

But Close believes his startup's zero-premium healthcare has made it easier and cheaper to hire talent and continue to grow.

“We say something about how we are a company where we value our team members,” he says.

“We believe that being able to take care of their children, wives and husbands is a priority for them,” he adds.

And Close has a very simple explanation for why he's willing to continue paying more for his employees' health care.

“Perhaps it really has to do with the fact that I am Canadian,” he says. “I just probably took for granted, 'Oh, sure, I don't pay for health care.'”