As we approach the fourth quarter, insurers are beginning to release their planned premiums for 2024. Out of 320 insurance carriers in the 2024 Affordable Care Act (ACA) market, the typical premium increase is six percent. That’s according to the Peterson-KFF Health System Tracker for August. The reasons for the increases include inflation, pandemic costs, fewer people on Medicaid coverage, and health care providers merging.

For ACA marketplace insurers across 50 states and D.C., premium adjustments for 2024 range from a drop of 15% to an increase of 100%. Most rate changes fall between 2% and 10%. Forty-one participants wanted lower premiums, and 76 insurers requested increases of more than 10%.

Increases for the Year Ahead for California Group Health

Covered California exchange officials expect ACA marketplace increases of nearly 10% in 2024. Some regions, including Imperial, Inyo, and Mono counties, could see increases of nearly 16%, after facing similar lifts last year.

For group health insurance, PwC is forecasting a seven percent increase in premiums for 2024. That increase is up from the previous two years, which increased 5.5% in 2022 and 6% in 2023. Researchers base their forecast on health plan surveys covering 100 million employer-sponsored large- and small-group members and 10 million ACA marketplace members.

Meanwhile, Aon is forecasting an even larger increase for employer-sponsored plans in 2024. The Aon analysis is anticipating health care cost increases of 8.5% — to more than $15,000 per employee. In contrast, an August report by the International Foundation of Employee Benefit Plans (IFEBP) found U.S. employers expect a seven percent increase for 2024.

The forecast by Aon has a stipulation. It anticipates a lack of action by employers to implement any cost-saving strategies. These include prior authorization, disease management adoption, wellness initiatives, spousal surcharges, and changing plan designs. These have helped employers in the past. If you adopt or have one or more in place, your cost increase could be lower.

What Can You Do?

You can take steps to reduce insurance expenses and help employees manage increased health care costs.

1: Shop Around

Even if you’re happy with your current health plan, it’s a good idea to periodically work with a broker to shop the market. You may find that there are new plan options to consider. We suggest using a broker because a broker will know your local market. That includes what medical groups and doctors are affiliated with each health plan. Or whether they have privileges at your or your employees’ preferred hospitals. Using a broker doesn’t cost you more and gives you additional insights and options when you make your decision.

That includes access to a multi-carrier, employee-choice exchange like CaliforniaChoice. It offers 130+ coverage options from eight different health plans. One employee might choose a PPO from Anthem Blue Cross because of a particular doctor in their network. Another employee who rarely visits the doctor might choose an HMO. With CaliforniaChoice, they have access to Health Net, Kaiser Permanente, and UnitedHealthcare. A third employee might choose a regional plan like Sharp Health Plan, Sutter Health Plus, or Western Health Advantage. A fourth might select Exclusive Provider Organization (EPO) coverage from Anthem or Cigna + Oscar.

Controlling costs is easy, too, with Defined Contribution. You choose how much to contribute toward employees’ premiums. You can contribute a Fixed Percentage (50% to 100%) of a specific plan and/or benefit, or you can choose a Fixed Dollar Amount.

Employees apply your contribution to whichever health plan and benefits they prefer. If any employees select a plan that costs more than your contribution, they simply pay the difference.

At renewal, you can adjust your contribution – up or down. You have complete control over what you spend on employee benefits.

2: Adapt a Health Savings Account (HSA) and/or Flexible Spending Account (FSA)

If your employees have a High Deductible Health Plan (HDHP), you can help them save. An HSA (available only to those with a HDHP) lets them set aside money on a pre-tax basis to pay for qualified medical expenses. They can use untaxed dollars in an HSA to pay their deductible(s), copayments, coinsurance, and other eligible expenses. That can help them with their total out-of-pocket health care costs.

The HSA amount you make available to employees is up to you. If employees don’t use all of their available HSA funds each year, it rolls over to the next plan year.

An FSA lets employees put aside funds on a pre-tax basis to pay for certain out-of-pocket health care costs. Unlike with an HSA, FSA funds do not roll over from one year to the next. Funds not used revert to the sponsoring employer.

For more information on HSA-eligible plans, visit the HealthCare.gov website. FSA information is also available on HealthCare.gov.

3: Explore Ways to Reduce Future Premium Increases

Initiatives like requiring a prior treatment authorization, adopting a chronic condition management program, or adding a nurse advice line for employees can be effective ways to reduce the impact of future rate increases.

Implementing employee wellness programs, offering HDHPs, and/or changing your plan design can work, too. Some employers choose audits to ensure dependent eligibility or add a spousal surcharge to limit costs.

Start by Talking with a Broker

As you plan for the year ahead, ask your employee benefits broker for a coverage review and quote. Keep in mind, CaliforniaChoice is available exclusively through brokers. If you you’re not currently working with a broker, you can search for a here.