Smart SpendingSmart Spending

Why Obamacare could raise your premiums at work

Employers' health care costs have been rising for years. But when open enrollment for 2014 starts up, they'll be blaming the ACA.

By Money Staff Oct 31, 2013 11:56AM

This post comes from Scott Cohn at partner site CNBC.


CNBC on MSN MoneyThe estimated 149 million Americans under age 65 who get their health insurance through their employers could be the next group to feel the impact of the Affordable Care Act.


Insurance Money © Comstock Images, JupiterimagesOpen enrollment for 2014 is about to begin at thousands of companies, and many employers are blaming Obamacare—at least in part—for cost increases they are passing on to their workers.


Employees' costs are expected to rise 5 to 7 percent next year, according to early estimates. Those annual increases have been a fixture for years. But in some 2014 open enrollment documents reviewed by CNBC, companies are specifically citing the law as a factor in next year's pricing.


"Federally mandated health care changes will require Comcast-NBCUniversal to pay new fees and implement plan design changes that will contribute to the increased cost of our plans," says the open enrollment guide for's parent company, where employee health care premiums are rising by double digits, and deductibles in some cases are doubling. The guide also cites rising health care delivery costs not directly related to the new law.


The open enrollment guide for a New York area law firm informs employees that premiums for one of its plans will be rising 6.5 percent in 2014. "Please note that approximately 3 percent of the increase is attributable to health care reform fees."


But most of the language in open enrollment guides is not specific about the portion of the increases attributable to the Affordable Care Act, allowing companies and insurers to use the new law as an excuse for increases they might have implemented anyway.


Jerry Burns, a Philadelphia-based manager for an international electronics firm, said he recently learned his premiums would be rising between 8 and 9 percent next year, though his employer did not say why.


"It was just, 'Here it is, pay it,'" he said. "I'm not happy about it, but you know it's coming every year."


Indeed, premium increases for employer-provided insurance have been happening for years.


In the past 10 years, worker contributions to their health insurance have risen 89 percent—from $2,412 to $4,565 per year, according to an annual survey by the Kaiser Family Foundation. During that same period, employers' share of the cost has also risen, though not as much. The study said employer costs rose 77 percent, from $6,657 per employee to $11,786.


The report, issued in August, predicted more changes as more far-reaching provisions of the Affordable Care Act go into effect next year.

Members of the CNBC Global CFO Council, representing public and private companies from various major sectors, are overwhelmingly bracing for rising costs. Of those responding to a survey this week, nearly 82 percent said they expect their company's health care costs to rise in 2014, though nearly half said the increases had little or nothing to do with the Affordable Care Act.


The open enrollment materials reviewed by CNBC also say more people are using health care. And a New Jersey publishing company cites a "significant increase in our claims experience."

But insurance providers say they are already passing on costs that are a direct result of the health care law.


"Aetna alone will pass through to its customers over $1 billion in taxes and fees associated with the Affordable Care Act that need to go into pricing," Chairman and CEO Mark Bertolini told CNBC in an interview this week.


Divided among Aetna's 22 million members, that billion dollars comes to about $45 apiece—hardly enough to account for the large increases. But other features of the Affordable Care Act could have larger price tags.


The requirement that children be allowed to remain on their parents' plans until age 26 has added millions of people to employer-provided coverage rolls with little corresponding increase in revenues. Another factor in rising premiums: the law's protections for people with pre-existing conditions, according to the CEO of Universal Health Care, which operates 23 acute care hospitals and 197 behavioral health centers across the country.


"That's not insurance, that's not spreading the risk," said CEO Alan Miller. "So you're going to have people who get a policy, once they're diagnosed with some dire condition."


The law is designed to offset the cost of covering people with pre-existing conditions by guaranteeing millions of new customers for insurance companies. But with the ultimate number of new customers still unclear, insurers are raising prices pre-emptively, according to David Axene, a fellow with the Society of Actuaries.


"Nobody knows who's going to sign up, nobody knows who will be the expensive ones and whether they'll sign up, and whether the young invincibles won't sign up, and so there's a lot of uncertainty right now as to how much things will cost," Axene said.


Axene said if fewer healthy people sign up for insurance this year—either because of website glitches, sticker shock, or because they choose to accept the federal penalty for going without insurance (the greater of $285 per family or 1 percent of family income for the first year)—insurers could raise employer premiums even higher, just in time for open enrollment next year.


More from CNBC



Oct 31, 2013 12:17PM
Wake up America! All of the twist and turns of Obama-care involves the working people paying more in health insurance premiums and more in taxes to fund Obama-care, while the shysters and free loaders are enjoying free or subsidized insurance on our dime.  It is just one grand transfer of our earnings to the shysters, free loaders, and parasite democrats.
Oct 31, 2013 12:39PM

I learned a lot from the Sebilius hearings yesterday. Number one is that the people in power of this wreck just don't care about Main St. Sebilius is not enrolled, neither is Tavenner. The obama's aren't enrolled. Lead by example? No, just do what we say..

Taking away the ability to browse plans BEFORE giving all of your information is what level that  used car salesmen stoop to.

People who voted for obama, don't remove your bumper stickers, leave them there and be proud of what you've done, helped in destroying healthcare as we knew it.

One thing a lot of us cannot do, is to educate those who don't want to be awaken. Then again, those types don't bear the burdens such times like these do they?

Oct 31, 2013 12:37PM
The one BIG thing that sill goes unaddressed is healthcare costs. This has done nothing to address that.
Oct 31, 2013 1:09PM
Hey, who ever wrote this aricle.  Get with the real world.  The Obama Care, is all ready driven up health care cost.  I had insurance, but not now.  I can't pay over $600 a month for single health coverage.  That is more than my house payment.  Wake up American Citizens.  We got to get our country back, and not let it be taken away by the thugs in power.
Oct 31, 2013 1:25PM
America got it totally wrong putting this president back in office--------------
Oct 31, 2013 12:43PM
When you are forced to pay for things you will never use and coverage you don't want, the cost goes up. And yes, it is the fault of obocare.
Oct 31, 2013 1:21PM

My health insurance  went up 33% for next year though company insurance, Aetna, Though it has gone up every year, I can only blame the government, Can you think of one business our government has run well? This is what happens when you elect democratic socialists.























Oct 31, 2013 12:26PM
This is the gift that just keeps giving.  Im so glad i didnt bring kids into this nation because it's turning into dog piss.
Oct 31, 2013 1:11PM

NO WAY!!! Obama told us to expect an average SAVINGS of $2,400.00 and if I would rather keep my plan and Doctor, then I absolutely could! He would NEVER lie to us!


Oct 31, 2013 1:11PM
5 or 6% increases my azz.  My company is looking at 30% increase -- all due to the ACA.  We were a small, healthy company that did not draw much on our plan.  Now our plan has to come up to the averages.  Thank, Obama!
Oct 31, 2013 1:08PM
What better incentive to live on the poverty line than to make a responsible working life unattractive on every level....way to go!!! ...What a nighmare the dream has become. Billions of dollars collected under a half **** medical plan to apease what..1% of society. Between financial entrapment, corporate dieveince,corupt law and the gov. cash vacuume, who in their right mind would want to work!!!
Oct 31, 2013 1:42PM
I gotta call BS here.  For the last 15 years, my employer has only increased my monthly premiums from about $32 a month to around $40 a month..  For this, I was able to visit a Dr for $20 out of pocket ($100 for an E.R. visit).  Now with Obamacare or the ACA (whichever you prefer), my premiums jump to nearly $60 per month, and any Dr. visit other than a check up, I have to cough up $1,500 out of pocket, and then I'll be 80% covered. I sure hope someone out there is benefitting from the ACA because just about everyone around me is getting totally screwed by this new healthcare plan.
Oct 31, 2013 1:19PM
Oh Tea Party --- you were right.  The progressives are lying liars as usual.

come February --again  --- SHUT IT DOWN !  ----   SHUT IT DOWN !

Oct 31, 2013 1:25PM
Oct 31, 2013 1:10PM
yet another cluster from obama, he has no clue.  the ACA (obamacare) sucks on all levels and I have letters stating the increases are due t changes in plans to comply with the new ACA.  good luck people  this one makes a train wreck that was carrying toxic crap crashing into a school in the middle of a city look good in comparison.  repeal this now  it sucks  and is just plain bad on so many levels we cant count them all still
Oct 31, 2013 1:13PM
The addition of dependents up to age 26 a few years ago added $5 million in cost to the medical plan of the company I worked for, which insured about 17,000 employees. That's $5 million right off the bottom line that had to be paid for somehow - no related revenue to help offset the added expense, just a simple message from our government saying "Do it or else." That was the first year I saw a 10% increase in my share of the cost, and it's been climbing ever since. We just got our rates for 2014 - the increases across the board are 25%, but we're all grateful to have what we have because 25% is actually the LOWEST increase I've heard of. Our illustrious administration needs to understand that the working class can't take on any more cost to pay for those who don't work. (Medicare and Medicaid were supposed to take care of those who can't work or have contributed their fair share pre-retirement - I don't mind contributing to help them, but I mind like crazy covering people who WON'T work.) Due to tax and insurance increases, I've been netting less each year for the past three years despite small salary increases. When does it end?
Oct 31, 2013 1:00PM

You believe Obama, you believe your employer, and you don't believe in God!  Jesus Christ is the best healer in the Universe.  You will get what you deserve.

Oct 31, 2013 1:59PM

I am self employed and we get our insurance through my wife's workplace her insurance just went up $150.00 a month and they dropped our prescriptions plan altogether. Obama and the Dems fools who signed this are doing more then al-Qaeda ever could to destroy this Country.

Oct 31, 2013 2:13PM
Let me tell you the truth about renewal premiums.  We renew our health insurance for our company in December each year to try and beat the increases forecast for the new year.  This year our insurance premium went up 36%.  That represents an increase of $118,126.00.  You can spin it any way you want but that is exactly how we were impacted by the ACA.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.