2021 Employer Health Benefits Survey

GENERAL ANNUAL DEDUCTIBLES FOR WORKERS IN PLANS WITH DEDUCTIBLES

• We consider a general annual deductible to be an amount that must be paid by enrollees before most services are covered by their health plan. Non-grandfathered health plans are required to cover some services, such as preventive care, without cost sharing. Some plans require enrollees to meet a service-specific deductible, such as for prescription drugs or hospital admissions, in lieu of or in addition to a general annual deductible. As discussed below, some plans with a general annual deductible for most services exclude specified classes of care from the deductible, such as prescriptions or physician office visits.
  • Eighty-five percent of covered workers in 2021 are enrolled in a plan with a general annual deductible for single coverage, similar to the percentages last year (83%) and five years ago (83%) but higher than the percentage ten years ago (74%) [Figure 7.2].
  • The percentages of covered workers enrolled in a plan with a general annual deductible for single coverage are the same for small firms (3-199 workers) (85%) and large firms (200 or more workers) (85%) [Figure 7.2].
  • The likelihood of being in a plan with a general annual deductible varies by plan type. Forty-three percent of covered workers in HMOs do not have a general annual deductible for single coverage, compared to 15% of workers in POS plans and 15% of workers in PPOs [Figure 7.1].
• For covered workers in a plan with a general annual deductible, the average annual deductible for single coverage is $1,669, similar to the average deductible ($1,644) last year [Figure 7.3] and [Figure 7.8].
  • For covered workers in plans with a general annual deductible, the average deductibles for single coverage are $1,271 in HMOs, $1,245 in PPOs, $1,852 in POS plans, and $2,424 in HDHP/SOs [Figure 7.6].
  • The average deductibles for single coverage are higher for most plan types for covered workers in small firms than for covered workers in large firms. For covered workers in PPOs, the most common plan type, the average deductible for single coverage in small firms is considerably higher than the average deductible in large firms ($1,972 vs. $976) [Figure 7.6]. Overall, for covered workers in plans with a general annual deductible, the average deductible for single coverage in small firms ($2,379) is higher than the average deductible in large firms ($1,397) [Figure 7.3].
  • The average general annual deductible for single coverage for covered workers in plans with a general annual deductible has increased 13% over the past five years and 68% over the past ten years [Figure 7.8].

GENERAL ANNUAL DEDUCTIBLES AMONG ALL COVERED WORKERS

• As discussed above, the share of covered workers in plans with a general annual deductible has increased significantly over time, from 74% in 2011 to 85% in 2021 [Figure 7.9]. The average deductible amount for covered workers in plans with a deductible has also increased over the period, from $991 in 2011 to $1,669 in 2021 [Figure 7.10]. Neither trend by itself, however, captures the full impact of changes in deductibles on covered workers. We can look at the average impact of both trends together on covered workers by assigning a zero deductible value to covered workers in plans with no deductible and looking at how the resulting averages change over time. These average deductible amounts are lower in any given year but the changes over time reflect both the higher deductibles in plans with a deductible and the fact that more workers face them.
  • Using this approach, the average general annual deductible for single coverage for all covered workers in 2021 is $1,434, similar to the amount last year ($1,364) [Figure 7.10].
  • The 2021 value is 17% higher than the average general annual deductible of $1,221 in 2016 and 92% higher than the average general annual deductible of $747 in 2011 [Figure 7.10].
• Another way to look at deductibles is the percentage of all covered workers who are in a plan with a deductible that exceeds certain thresholds. Fifty-eight percent of covered workers are in plans with a general annual deductible of $1,000 or more for single coverage, similar to the percentage last year [Figure 7.13].
  • Over the past five years, the percentage of covered workers with a general annual deductible of $1,000 or more for single coverage has grown 13%, from 51% to 58% [Figure 7.13].
  • Workers in small firms are considerably more likely to have a general annual deductible of $1,000 or more for single coverage than workers in large firms (72% vs. 52%) [Figure 7.12].
  • In 2021, 29% of covered workers are enrolled in a plan with a deductible of $2,000 or more, similar to the percentage last year (26%) [Figure 7.14]. This percentage is much higher for covered workers in small firms than large firms (45% vs. 22%) [Figure 7.12].

  

  Figure 7.9: Prevalence and Value of General Annual Deductibles for Single Coverage, by Firm Size, 2006-2021

GENERAL ANNUAL DEDUCTIBLES AND ACCOUNT CONTRIBUTIONS

• One of the reasons for the growth in general annual deductibles has been the growth in enrollment in HDHP/SOs, which have higher deductibles than other plans. While higher deductibles in other plan types generally increases enrollee out-of-pocket liability, the shift in enrollment to HDHP/SOs does not necessarily do so because many HDHP/SO enrollees receive an account contribution from their employers, which in essence reduces the higher cost sharing in these plans.
  • Twenty-seven percent of covered workers in an HDHP with an HRA and 2% of covered workers in an HSA-qualified HDHP receive an account contribution from their employer for single coverage at least equal to their deductible, while another 20% of covered workers in an HDHP with an HRA and 17% of covered workers in an HSA-qualified HDHP receive account contributions that, if applied to their deductible, would reduce the deductible to $1,000 or less [Figure 7.16].
  • If we reduce the general annual deductibles by employer account contributions, the percentage of covered workers with a deductible of $1,000 or more would be reduced from 58% to 50% [Figure 7.13] and [Figure 7.15].

GENERAL ANNUAL DEDUCTIBLES FOR WORKERS ENROLLED IN FAMILY COVERGE

General annual deductibles for family coverage are structured in two primary ways: (1) with an aggregate family deductible, the out-of-pocket expenses of all family members count against a specified family deductible amount, and the deductible is considered met when the combined family expenses exceed the deductible amount; (2) with a separate per-person family deductible, each family member is subject to a specified deductible amount before the plan covers expenses for that member, although many plans consider the deductible for all family members met once a specified number (typically two or three) of family members meet their specified deductible amount.¹⁷

• Forty-two percent of covered workers in HMOs are in plans without a general annual deductible for family coverage; the percentages in plans without family deductibles are lower for workers in PPOs (13%) and POS plans (13%). As defined, all covered workers in HDHP/SOs have a general annual deductible for family coverage [Figure 7.20].
• Among covered workers enrolled in family coverage, the percentages of covered workers in a plan with an aggregate general annual deductible are 28% for workers in HMOs; 50% for workers in PPOs; 72% for workers in POS plans; and 73% for workers in HDHP/SOs [Figure 7.20].
  • The average deductible amounts for covered workers in plans with an aggregate annual deductible for family coverage are $3,400 for HMOs; $3,000 for PPOs; $4,130 for POS plans; and $4,705 for HDHP/SOs [Figure 7.21]. The average deductible amounts for aggregate family deductibles are similar to last year for each plan type.
• For covered workers in plans with an aggregate deductible for family coverage, the average annual family deductibles in small firms are higher than the average annual family deductibles in large firms for covered workers in HMOs, PPOs and HDHP/SOs [Figure 7.21].
• Among covered workers enrolled in family coverage, the percentages of covered workers in plans with a separate per-person annual deductible for family coverage are 30% for workers in HMOs; 37% for workers in PPOs; 15% for workers in POS plans; and 27% for workers in HDHP/SOs [Figure 7.20].
  • The average deductible amounts for covered workers in plans with separate per-person annual deductibles for family coverage are $1,190 for HMOs, $1,126 for PPOs, and $2,748 for HDHP/SOs [Figure 7.21].
    • Forty-four percent of covered workers in plans with a separate per-person annual deductible for family coverage have a limit for the number of family members required to meet the separate deductible amounts [Figure 7.24]. Among those covered workers in plans with a limit on the number of family members, the most frequent number of family members required to meet the separate per-person deductible is two [Figure 7.25].

CHARACTERISTICS OF GENERAL ANNUAL DEDUCTIBLES

• The majority of covered workers with a general annual deductible are in plans where the deductible does not have to be met before certain services, such as physician office visits or prescription drugs, are covered.
  • Majorities of covered workers (76% in HMOs, 70% in PPOs, 64% in POS plans, and 71% in HDHP/HRAs) who are enrolled in plans with general annual deductibles are in plans where the deductible does not have to be met before physician office visits for primary care are covered [Figure 7.27].
  • Similarly, among workers with a general annual deductible, large shares of covered workers in HMOs (95%), PPOs (89%), POS plans (85%), and HDHP/HRAs (84%) are enrolled in plans where the general annual deductible does not have to be met before prescription drugs are covered [Figure 7.27].

HOSPITAL ADMISSIONS AND OUTPATIENT SURGERY

• Whether or not a worker has a general annual deductible, most workers face additional types of cost sharing (such as a copayment, coinsurance, or a per diem charge) when admitted to a hospital or having outpatient surgery. The distribution of workers with cost sharing for hospital admissions or outpatient surgery does not equal 100%, as workers may face a complex combination of types of cost sharing. For this reason, the average copayment and coinsurance rates include workers who may have a combination of these types of cost sharing.
• In addition to any general annual deductible that may apply, 68% of covered workers have coinsurance and 12% have a copayment that apply to inpatient hospital admissions. Lower percentages of covered workers have per day (per diem) payments (5%), a separate hospital deductible (3%), or both a copayment and coinsurance (9%), while 15% have no additional cost sharing for hospital admissions after any general annual deductible has been met [Figure 7.28].
  • For covered workers in HMOs, copayments are more common (23%) and coinsurance (37%) is less common than the average for all covered workers [Figure 7.28].
  • HDHP/SOs, on average, have a different cost-sharing structure than other plan types for hospital admissions. Only 2% of covered workers in HDHP/SOs have a copayment for hospital admissions, lower than the average for all covered workers [Figure 7.28].
  • The average coinsurance rate for a hospital admission is 20%, the average copayment is $321 per hospital admission, and the average per diem charge is $261 [Figure 7.31]. Seventy-one percent of workers enrolled in a plan with a per diem for hospital admissions have a limit on the number of days a worker must pay the amount [Figure 7.32].
• The cost-sharing provisions for outpatient surgery are similar to those for hospital admissions, as most workers have coinsurance or copayments. In 2021, 16% of covered workers have a copayment and 68% have coinsurance for outpatient surgery. In addition, 7% have both a copayment and coinsurance, while 15% have no additional cost sharing after any general annual deductible has been met [Figures 7.29 and 7.30].
  • For covered workers with cost sharing for outpatient surgery, the average coinsurance rate is 20% and the average copayment is $162 [Figure 7.31].

COST SHARING FOR PHYSICIAN OFFICE VISITS

• The majority of covered workers are enrolled in health plans that require cost sharing for an in-network physician office visit, in addition to any general annual deductible.¹⁸
  • The most common form of cost sharing for an in-network physician office is a copayment. Seventy-one percent of covered workers have a copayment for a primary care physician office visit and 20% have coinsurance. For office visits with a specialty physician, 69% of covered workers have a copayment and 22% have coinsurance [Figure 7.35].
    • The form of cost sharing for physician office visits varies by firm size. For in-network primary care office visits, covered workers in small firms are more likely to have a copayment (78% vs. 68%) are are less likely to have coinsurance (9% vs. 25%). The pattern is similar for in-network office visits with specialists.
  • Covered workers in HMOs, PPOs, and POS plans are much more likely to have copayments for both primary care and specialty care physician office visits than workers in HDHP/SOs. For primary care physician office visits, 21% of covered workers in HDHP/SOs have a copayment, 57% have coinsurance, and 16% have no cost sharing after the general annual plan deductible is met [Figure 7.35].
  • Among covered workers with a copayment for in-network physician office visits, the average copayment is $25 for primary care and $42 for specialty physician office visits, similar to the amounts last year [Figure 7.36].
  • Among covered workers with coinsurance for in-network physician office visits, the average coinsurance rates are 19% for a visit with a primary care physician and 20% for a visit with a specialist, similar to the rates last year [Figure 7.36].

OUT-OF-POCKET MAXIMUMS

• Virtually all covered workers are in a plan that partially or totally limits the cost sharing that enrollees must pay in a year. This limit is generally referred to as an out-of-pocket maximum. The Affordable Care Act (ACA) requires that non-grandfathered health plans have an out-of-pocket maximum of no more than $8,550 for single coverage and $17,100 for family coverage in 2021. Out-of-pocket limits in HSA qualified HDHP/SOs are required to be somewhat lower.¹⁹ Many plans have complex out-of-pocket structures, which makes it difficult to accurately collect information on this element of plan design.
• In 2021, more than 99% of covered workers are in a plan with an out-of-pocket maximum for single coverage. This is a significant increase from 98% in 2016 [Figure 7.42].
• For covered workers in plans with an out-of-pocket maximum for single coverage, there is wide variation in spending limits.
  • Thirteen percent of covered workers in plans with an out-of-pocket maximum for single coverage have an out-of-pocket maximum of less than $2,000, while 27% have an out-of-pocket maximum of $6,000 or more [Figure 7.44].