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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: Data from the Medical Expenditure Panel Survey (MEPS) has consistently shown that premiums for individually purchased, or nongroup, health care plans are much lower than premiums for employer-sponsored health insurance plans. Kaiser Family Foundation recently examined the reasons why in its report, Comparison of Expenditures in Nongroup and Employer-Sponsored Insurance. According to Kaiser, two main explanations for the difference in premium costs are: (1) nongroup enrollees must pay a higher share of health care expenses out of pocket; and (2) nongroup enrollees are more likely to report being in “excellent” health.
The average expenditures paid by enrollees in employer-sponsored health insurance plans are 236% higher than expenditures for nongroup enrollees ages 0-17, 53% higher for those ages 18-34, 72% higher for those ages 35-49, and 85% higher for those ages 50-64.
The actual dollar amounts paid annually for enrollees in employer-sponsored plans are as follows, with nongroup enrollee amounts in parentheses: $560 ($228) for those ages 0-17; $1,049 ($694) for those ages 18-34; $1,459 ($906) for those ages 35-49; and $2,581 ($1,424) for those ages 50-64. Kaiser believes that these very large differences in payments are because nongroup policies are providing less coverage than employer-sponsored insurance.
Enrollees in nongroup policies do have higher out-of-pocket costs than those enrolled in employer-sponsored plans. MEPS shows that 43% of total health care expenditures by nongroup enrollees are paid out of pocket, compared with 22% for enrollees in employer-sponsored plans. The differences in out-of-pocket expenditures persist for those with high health care costs. Among members in the top 20% of spending, nongroup enrollees paid 47% out of pocket, while enrollees in employer-sponsored plans paid 25% out of pocket. Among members in the top 5% of spending, nongroup enrollees paid 30% out of pocket, while enrollees in employer-sponsored plans paid 15% out of pocket.
Kaiser also believes that nongroup coverage costs less than employer-sponsored coverage because nongroup enrollees are healthier, on average, than those enrolled in employer-sponsored plans. The MEPS data shows that nongroup enrollees are more likely than employer-sponsored health plan enrollees to classify their health status as excellent (43% versus 35%). Kaiser found a similar result for mental health status (52% versus 45%).
Kaiser’s report uses data from MEPS, which provides annual estimates relating to the health status, expenditures, coverage, and health care use of the U.S. population, to compare the insurance payments for, and out-of-pocket payments by, those with individual health insurance and those with employer-sponsored health insurance. To read the entire report, visit http://www.kff.org/insurance/snapshot/chcm111006oth.cfm.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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