Health Care Reform Act Funding Poses Many Issues

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WASHINGTON—No federal law comes close to the 2010 health care reform law when it comes to its potential impact on employer-sponsored health care plans and the issues confronting them.

“The law has shifted health care benefits from a ‘nice to have’ to a ‘have or else’ posture that is unprecedented in our previously voluntary approach to employee benefits,” said Andy Anderson, a partner with Morgan Lewis & Bockius L.L.P. in Chicago.

Two years after the passage of the Patient Protection and Affordable Care Act, employers already have felt the impact of the law. Since Congress approved the bill and President Barack Obama signed the measure into law in March 2010, employers have had to make numerous changes to their health care plans. Among other things, employers have had to amend their plans to cover employees’ adult children up to age 26, eliminate annual dollar limits, provide full coverage for preventive services in many cases, and eliminate flexible spending account reimbursement for nonprescription drugs. Employers with early retiree health care plans had to set up a claims reporting system to take advantage—before federal funding was exhausted—of a $5 billion program created by the health care reform law that partially reimburses plan sponsors for claims incurred by retirees at least age 55 but not eligible for Medicare and their dependents. That fund already has run dry.

Some issues are ongoing and involve continuing cost/benefit analysis. For example, the law exempts grandfathered health care plans from meeting certain reform law requirements, such as providing full coverage for preventive services.

But to qualify for grandfathered status, employers face limitations on how much they can shift funding cost increases to employees through increases in deductibles and copayments. That will involve economic calculations to determine if the savings achieved through maintaining grandfathered status for their health care plans outweighs financial savings from boosting cost-sharing requirements.

Yet another funding cost/benefit analysis triggered by the law involves a program Congress authorized in a 2003 law that gives hefty tax breaks and financial subsidies to employers that offer prescription drug benefit plans to Medicare-eligible retirees. The intent of the program was to encourage employers to maintain their prescription drug plans rather than flooding the newly established government Medicare Part D prescription drug plan with millions of additional retirees. However, the health care reform law removes some of those tax breaks provided in the Medicare Retiree Drug Subsidy program, effective in 2013.With the watering down of those tax breaks, employers will have to decide if it still makes sense to offer those plans or analyze if there are other, perhaps even more financially beneficial programs through which coverage may be provided.

“There may be better ways to do it,” said Dan Levin, a principal with Buck Consultants L.L.C. in Chicago. But the retiree prescription drug issue pales in comparison with the issues posed by the health care reform law provision of greatest significance to employers: the requirement, effective in 2014, that they offer “qualified” affordable health care plans or face financial penalties ranging from $2,000 to $3,000 per full-time employee.

 

“This will be a sea change for employers. We will go from a voluntary system to one in which there are mandatory obligations,” Mr. Anderson said. The law will present an array of financial issues that employers will have to consider. For example, under the law, employers are liable for financial penalties if they don’t offer coverage to full-time employees. Full-time is defined as working no less than 30 hours a week. That will present a problem for employers with large numbers of part-time employees who work more than 30 hours a week but are not eligible for health care coverage. They could, of course, revamp eligibility requirements so that the part-time employees would be eligible for health care coverage. That approach, though, would significantly increase their health care plan costs. Alternatively, they could do nothing. But that would be costly, too. If just one lower-paid part-time employee who works at least 30 hours a week were not offered coverage, and was eligible for a health care reform premium subsidy and used it to buy coverage in a state insurance exchange, the $2,000-per-employee penalty would be assessed on all the employer’s full-time employees, including those with coverage.

Yet another approach—reducing the number of hours part-time employees work to below the 30-hour threshold—also presents issues. One issue is whether such action could expose them to liability under the Employee Retirement Income Security Act. “Under ERISA, employers cannot take employment actions for the sole purpose of preventing an employee from becoming eligible under an ERISA-covered plan, such as a health care plan, said Tracey Giddings, a director with PricewaterhouseCoopers L.L.P. in Tampa.

“An ERISA issue could be created if the reduction in hours was taken for the sole purpose of avoiding the $2,000 penalty,” Ms. Giddings said.

Starting in 2018, employers face yet another issue: exposure to a health care reform law excise tax. That 40% excise tax will be applied on health care plans whose costs exceed $10,200 for single coverage and $27,500 for family coverage. The tax will be paid by insurers—or third-party administrators in the case of self-funded plans—but experts expect insurers and TPAs to recoup excise tax payments by imposing additional charges on employers.

While 2018 is years away, employers already now have to decide what actions to consider taking to reduce the likelihood of being hit with the tax. Yet moving too fast on changing plan design and funding approaches poses yet another issue. Sometime in June, the U.S. Supreme Court is expected to hand down a decision that potentially could make employer actions unnecessary. Under one scenario, the high court, which is reviewing the constitutionality of the law’s individual mandate, could decide that the mandate is unconstitutional and so intertwined with the entire Patient Protection and Affordable Care Act that the justices would strike down the broader law as a result. “None of this may matter much until we hear from the Supreme Court,” Mr. Anderson of Morgan Lewis & Bockius said.

This story is from the May 7, 2012, issue of the weekly print edition of Business Insurance, a special theme issue featuring an in-depth look at the alternative funding options employers can use to help rein in the costs of health care insurance for their workforce.

Written By: Jerry Geisel

Workers’ Compensation Cost Containment

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Survey: 59% of Employers Say “Cost Containment” is Top Work Comp Concern in 2012

Nearly six in 10 businesses believe cost containment is their top workers’ compensation concern in the next 12 months. The most commonly mentioned other issues by respondents were increasing exposures and renewals, both cited by 35% of businesses; rising fraud, 31%; market availability, 26%; and carrier stability, 20%, the survey found.

Employers in the survey said the most effective workers’ comp cost-containment methods were having a safety-oriented culture, mentioned by 65% of respondents, and a light-duty or return-to-work program, 59%. Other measures cited included, in descending order of popularity, onsite accident and/or loss-prevention evaluations; zero-accident goals; a dedicated claims manager; and a preferred occupational-medicine facility. Only 45% of respondents said they have a written return-to-work policy.

Those who participated in the survey represented companies in 20 business categories, with the most common sectors being manufacturing, 17%; healthcare and social-assistance providers, both 15%; and construction, 13%. Approximately 57% of businesses surveyed have annual workers’ comp premium of less than $50,000.

County of Orange: Employer liable for employee’s disability harassment by co-workers

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February 10, 2012, by Roberto Ceniceros

SANTA ANA, Calif.—Orange County must pay a disabled juvenile hall corrections officer more than $820,000 for disability harassment, including statements co-workers posted on a blog, a California appeals court has ruled.

Thursday’s finding in Ralph Espinoza vs. County of Orange stems from a lawsuit filed by Mr. Espinoza, who was born with his right hand lacking fingers and a thumb. He often kept the hand in his pocket because he was self-conscious, court records state.

He sued Orange County under California’s Fair Employment and Housing Act, citing disability discrimination, retaliation and failure to prevent harassment, among other accusations.

Evidence presented during a trial included blog postings that began in 2006 in which one co-worker offered other officers $100 to photograph Mr. Espinoza’s hand. Other co-workers posting on the blog referred to Mr. Espinoza as the “one arm bandit,” and “rat claw boy.”

Court records show his coworkers branded Mr. Espinoza a “rat” for having reported improper treatment of inmates.

HARASSMENT NOT PREVENTED:
A jury found the county liable for harassment based on plaintiff’s disability and failure to prevent the harassment.

Mr. Espinoza was awarded more than $820,000, consisting of $700 for medical expenses, $320,000 in lost earnings, and $500,000 for mental distress.

The county appealed, arguing that the postings were improperly considered by the trial court because they were anonymous and the county did not create or approve the blog.

The employer also argued that the harassment was not severe or pervasive enough to satisfy FEHA requirements.

But California’s 4th Appellate District Court upheld the lower court’s award, finding among other things that there was evidence that county employees accessed the blog using workplace computers.

“Further, defendant completely ignores the other conduct at the workplace, i.e., the incidents where employees put their right hands in their pockets, the scrawling of ‘the claw’ on plaintiff’s (work) cart and elsewhere, the occasions when plaintiff was ignored, and the like.”

Top New CALIFORNIA Laws for 2012

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Governor Brown signed nearly two dozen bills into law recently. While many may affect you as an employer, here is a brief overview of some of the most important changes that take effect January 1, 2012 (unless otherwise specified).

AB 22: Employers may not use credit reports for applicant or employment purposes, except in limited circumstances such as for a managerial position or handling confidential/proprietary information.

AB 592: Formal recognition that it is an unlawful employment practice to interfere with any right provided to an employee under the California Family Rights Act (CFRA) or Pregnancy Disability Leave (PDL) law.

AB 887: Further defines “gender” under the Fair Employment and Housing Act to include both gender identity and “gender expression.” Gender expression is defined as “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”

AB 1236: Prohibits the state or a city, county, or special district from requiring an employer other than these listed government entities to use an electronic employment verification system (E-Verify) except when required by federal law or as a condition of receiving federal funds.

AB 1396: Requires employers to have written agreements of employment by January 1, 2013, when employees are paid on commission.

SB 299: Makes it unlawful to refuse to maintain and pay for insurance coverage for an employee who is on Pregnancy Disability Leave under the same conditions that coverage would have been provided if the employee had continued in employment during PDL leave.

SB 459: Provides new penalties for misclassifying independent contractors “willfully.” Imposes joint liability on non-attorney outside consultants who knowingly advise an employer to treat an individual as an independent contractor to avoid employee status.

SB 559: Prohibits genetic information discrimination under the Fair Employment and Housing Act and Unruh Civil Rights Act.

SB 757: Prohibits group health insurance plans or policies from discriminating in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex.

In addition, there were several laws related to wage penalties that increase or clarify employer obligations and allow employees further wage recovery for underpayment of wages. For further questions or details concerning these or any other employment laws and how they relate to your business, please contact JorgensenHR at (661) 600-2070.

Source: AALRR Alert

Bone Marrow Leave Clarification Bill Signed by Governor

SB 272: provides employers with the needed clarity and certainty as to how this leave should be implemented, so that employers can comply with this leave requirement and minimize any risk of litigation.

SB 1304: enacted in 2010, requires employers to provide employees with paid leave of either five days for bone marrow donation or 30 days for organ donation, within a one-year period. Given the ambiguity with some of the terms utilized in SB 1304, California employers were uncertain how this paid leave should be implemented.

* Clarifies that the one-year period referenced in the statute is 12 consecutive months from the date of the employee’s request for leave, not a calendar year.
* Confirms that the days of leave are business days, as opposed to calendar days. Additionally, SB 272 provides certainty that the benefits of an employee must be maintained at the same level during the paid leave, as if he/she had continued to work during that period.
* Specifies that employers that have a paid time off (PTO) program, rather than sick leave and vacation leave, can require that an employee take up to five days of PTO as a part of the employee’s leave.

Source: California Chamber of Commerce

New Notice of Pay Details

Effective January 1, 2012, a new law (AB 469) requires employers to provide at the time of hire, a notice to nonexempt employees, that specifies:

* The rate of pay and the basis, whether hourly, salary, piece commission or otherwise, including any overtime rate
* Allowances, if any, claimed as part of the minimum wage, including meal and lodging allowances
* The regular pay day designated by the employer as required under the Labor Code
* The name of the employer, including any “doing business as” names
* The physical address of the employer’s main office or principal place of business and any mailing address, if different
* The telephone number of the employer
* The name, address and telephone number of the employer’s workers’ compensation carrier

Additionally, if there is any change to the information in the notice, the employer must notify each employee, in writing, within seven calendar days of the changes either by providing a written amendment, a new notice or via their paycheck stub, if that information is contained therein.

Though this law only applies to non-exempt employees, if there is ever a question of misclassification it could raise concern over when this notice was due. As a good practice, employers may want to provide the notice to exempt employees as a well. Additionally, the law requires the Labor Commissioner to prepare a template and make it available. This template, Notice to Employee Labor Code Section 2810.5 is now available at California Department of Industrial Relations.

Source: HR California Extra

NLRB New Poster Requirement Deadline Moved to April 30, 2012

The National Labor Relations Board (NLRB) announced that it is postponing the start date requiring employers to notify employees of their rights under the National Labor Relations Act (NLRA). The new posting requirement now takes effect on April 30, 2012.

Source: California Chamber of Commerce

New 2012 Exempt Classification Rates

California’s Department of Industrial Relations (DIR) announced rate changes on exemptions for computer software employees and licensed physicians. The new rates take effect January 1, 2012.

For computer software employees, the minimum hourly rate of pay exemption increased to $38.89, the minimum monthly salary increased to $6,752.19 and the minimum annual salary exemption increased to $81,026.25. For licensed physicians or surgeons, the minimum hourly rate of pay exemption increased to $70.86.

Source: California Chamber of Commerce

There have been a few changes for 2012 that may affect statements and policies in your Employee Handbook.

(1) If your organization is not FMLA eligible, you will have to begin health insurance continuation during Pregnancy Disability Leaves of Absence. Many of you already have this practice, but for those who do not, please know that this is a change that goes into effect 12/1/2012.

(2) There also has been an update to what is considered a “protected class” in California. Effective January 1, “gender expression” and “gender identity” will be added. In order to reflect this change, we recommend a slight modification to your EEO Policy Statement and No Harassment Policy to reflect:

[Your Company Name] is an equal employment opportunity employer and strives to comply with all applicable laws prohibiting discrimination based on race, religion, color, sex, gender identity or expression, sexual orientation, national origin, ancestry, citizenship status, uniform service member status, marital status, pregnancy, age, a diagnosis or history of cancer, disability, genetic characteristics or any other category protected by applicable federal, state, or local laws.

From: Steve Keyzers [mailto:skeyzers@hralternatives.com]
Sent: Wednesday, January 04, 2012 3:49 PM
To: Steve Keyzers
Subject: 2012 Update

Dear Valued Client,

In an earlier e-mail I mentioned the new requirement to provide health insurance continuation during a pregnancy disability leave even if your company was not covered by FMLA. I mistakenly used an effective date of 12/1/12 instead of 1/1/12. I apologize for any confusion.

In our Fall HR Update, we also mentioned the Wage Theft Prevention Act notice now required in California. This notice is NOW required for every new hire NON-EXEMPT EMPLOYEE, and every other non-exempt employee in the State of California, every time there is a change of information for an employee. Changes of information include:

(1) rate(s) of pay and basis for them, whether by the hour, shift, day, week, salary, piece, commission, or otherwise, including any overtime rates

(2) allowances, if any, claimed as part of the minimum wage, including for meals or lodging

(3) regular payday designated by the employer

(4) name of employer, including any “doing business as” names used

(5) physical address of employer’s main office or principal place of business, and mailing address if different

(6) telephone number of the employer

(7) name, address, and telephone number of the employer’s workers’ compensation insurance carrier

(8) any other information the Labor Commissioner deems material and necessary

This is a new requirement and we understand it can be confusing, so please do not hesitate to call us. Since this is a new law, we are advising our clients to take the safest route. We believe the safest route is to use the attached “template” to communicate the information whenever any of the above occurs. You can take the template and populate it with employer information, and then save that as your template and populate the wage information whenever it changes. You can also prepare your template with the workers’ compensation information to avoid extra work, but if/when that changes, it requires a whole new communication to all non-exempt employees.

Again, we are here for you. If you have any questions, please contact us.

Stephen Keyzers, SPHR

HR Alternatives, Inc.

4910 Campus Drive

Newport Beach, CA 92660

O: (949) 453-6250

F: (949) 453-6255

www.hralternatives.com

P Please consider the environment before printing out this message.

Information provided by HR Alternatives is not intended as a substitute for employment law counsel. This e-mail and any files transmitted with it are intended only for the person or entity to which it is addressed and may contain confidential material and/or material protected by law. Any re-transmission or use of this information may be a violation of that law. If you received this in error, please contact the sender and delete the material from any computer.

Winter Driving

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Winter is upon us again, bringing fog, wet roadways, and poor visibility. The following are some tips for driving safely in winter conditions:

FOG can obscure visibility and depth perception. Observe the following precautions:

  • Use windshield wipers and defrosters. Turning on the air conditioner when you use the defroster helps prevent the fog from getting worse.
  • Reduce your speed and increase following distance from the cars in front of you.
  • Turn on your headlights (fog lights or low beams only) to see better and to be seen.
  • Fog can grow dense instantly. Reduce your speed gradually, as drivers following you may fail to see your brake lights.

HYDROPLANING occurs when excessive water on the roadway causes the tires to lose traction, resulting in the vehicle skidding. To avoid hydroplaning and skids:

  • Inspect tires for wear and proper inflation. Adequate treads prevent hydroplaning by channeling the water through the tire’s grooves.
  • When it begins to rain, immediately reduce your speed without applying the brakes. The first 10-15 minutes after it begins to rain are the most dangerous; roadway dust and oil combine with the water to create a slick surface, which will eventually wash away.
  • When braking on a very slick road, shift to neutral gear and press the brake pedal down gradually. When in neutral, all four wheels will brake equally since none of the wheels are receiving power.
  • Increase your following distance on slick roads, but stay in the “tire tracks” of the vehicle ahead. The water on the roadway will be channeled away through the grooves.

RESPONDING TO A SKID:

  • Ease off the accelerator, but do not brake. Braking will only make the skid worse.
  • Correct a skid by steering toward your intended path. The longer you wait, the more the vehicle will slide out of your intended path.
  • Make steering corrections gradually and smoothly. Overcorrecting can result in a counter-skid, either a fishtail (when your rear wheels skid back and forth) or a spinout (your rear wheels lose all traction and the vehicle spins around).
  • Make steering corrections continuously. As soon as the skid begins to change direction, counter steer to center the vehicle on the path of travel.   Continue correcting until you are out of the skid and back in control.
  • Scan constantly for the conditions ahead and to the sides of your vehicle.
Written By: Non-Profits United

Cyberspeed

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New advances in communication technology pose new and greater risks behind the wheel, particularly to younger drivers who tend to adopt new technologies more readily than older drivers. However, some new technologies, like the iPod, spread rapidly to all age groups. The following paragraph from an article posted on the National Safety Council Web site describes the new risks:

“Infotainment technologies include a wide array of devices that enable drivers to perform tasks unrelated to driving, such as making telephone calls, watching videos, managing e-mail, sending and reading instant messages, and selecting and listening to music. Even commonly accepted devices in vehicles, such as a car radio, are changing substantially with satellite radio and MP3 music players like the iPod. As of 2007, approximately 70% of new cars will include a capability to connect to iPods. All of these systems have the potential to distract drivers, but cell phones have attracted the most attention.”

Each of these devices presents a different level of risk. Some should be avoided entirely, like watching videos, managing e-mails, or text messaging. The iPod can also be a severe distraction if one is continually choosing new songs, or it can be used more safely like a radio by choosing song selections infrequently and/or when the vehicle is not in motion.

Frequent Internet users who surf the Net with high-speed servers should also be aware of a different kind of peril: Frequent super-fast computer usage may affect driving behavior.

Surfing the Internet from site to site is like driving a car from place to place. After all, we call the Internet the information super highway. On the Internet, we rapidly navigate from one site to another, often accessing multiple sites at once or flipping rapidly back and forth between two sites.   Unlike the real-world driving environment, cyberspeed goes incredibly fast and there are no rules of the road. Then there are video games that simulate the actual driving environment. The difference is that with video games, the operator races around city streets or racetracks at breakneck speeds, with no concern for traffic laws or safe driving behavior, crashing into people, walls, or other vehicles.

Can our brain readily shift from the anarchy of the cyberworld to the strict requirements of the driving environment? We don’t have an answer to that question. Until we do, it may be prudent to make a conscious effort to remind ourselves when we get behind the wheel that we are on the real highway and that cyberspeed and other cyber behavior is only appropriate on the Internet or when playing video games.

Written By: NPU

Industrial Safety – “Oh! My Aching Back”

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The most common types of back injuries are:

• Strain. A strain happens when you overuse or overstretch your back muscles. This often happens to people who try to do too much when their backs are not properly conditioned. Back strains are very common in the workplace as well as in many sports. Back strains often occur suddenly when the back is twisted or overly exerted when picking up a load.

• Sprain. A sprain happens when a ligament in the back is torn or excessively stretched. This could be the result of a sudden forceful movement, or from a small movement that injures an already weak ligament.

• Bulging disk. A bulging disk occurs when a disk begins to come out from between two vertebrae. Can you say “Ouch?!” This can cause painful pressure on the spinal cord or other nearby organs. Often, the back muscles try to compensate for this injury, until the muscles themselves become strained.

• Herniated disk. A herniated disk occurs when the disk begins to leak its cushioning fluid. The disk loses its ability to cushion the vertebrae, resulting in pressure on vertebrae, the spinal cord, and possibly, other organs. A herniated disk can develop into a serious and long lasting condition if it is not properly treated promptly.
It might surprise your employees to know that often back injuries are caused by the very activities that they do every day. These activities, when performed correctly, are very safe to do. But one wrong move, and “Oh, my aching back!!”

While there are many different activities that can lead to back injuries and aches, these are among the most common:
• Reaching into a rack or bin, or reaching overhead while lifting something.

• Bending over to lift or unload something, or even to tie your shoes.

• Sitting or standing for long periods of time, or using poor posture while sitting or standing, can also lead to back injury and pain.

• Improper lifting and carrying. Making the wrong moves when lifting, such as lifting with the back instead of the legs, or twisting while carrying, can easily lead to a back injury.

Fortunately, proper training can prevent back injuries!

Written By: NPU

National Labor Relations Board Rule Postponed

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The National Labor Relations Board has just announced it has postponed the effective date of its new rule mandating the workplace posting of an official Notice of Employee Rights under the National Labor Relations Act. The rule had been scheduled to go into effect on November 14th. Now, the rule will be effective on January 31, 2012. (For more information about the new rule, see our article, New Posting Required: Labor Board Rule on Notification of Employee Rights under Labor Act.)
The NLRB’s stated reason for the postponement is to “allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.” The Board cited confusion over which business fall within the jurisdiction of the statute. Unlike many other employment laws, coverage does not depend on a minimum number of employees, but the extent to which a company engages in interstate commerce. The thresholds, generally expressed in terms of gross volume of business for different industries, are very low. Almost all private sector employers are subject to the Act.
The Board states that “[n]o other changes in the rule, or in the form or content of the notice, will be made.”
The additional 11 weeks will help employers to prepare properly to comply. We recommend that employers consider an overall compliance program, to be discussed during our upcoming “Surveying the New Labor Law Landscape” series, and as described in our complimentary national webinar, “Notification of Employee Rights Under the National Labor Relations Act: Are You Prepared to Post?” (http://www.jacksonlewis.com/webinars.php).

Written By: HR Alternatives

Report Shows Jobs Flowing From China Back To US.

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Report Shows Jobs Flowing From China Back To US.
ABC World News (10/6, lead story, 3:00, Sawyer) reported in its lead story that “for the past decade, Americans have watched as 4.5 million American jobs have gone overseas to China.” But in “a major sign that hemorrhage may be ending, those jobs are starting to come home.” A “powerful new report from the highly respected Boston Consulting Group…says three million jobs are now on their way back to America.” Noting that Ford, Whirlpool and Continental Tire are all planning to boost US hiring, ABC (Muir) added, “Wages in China are rising rapidly and…when you factor in everything else,” including shipping costs, “suddenly the math for so many companies no longer makes sense. So, they’re deciding that ‘Made in America’ makes more sense.”
The Wall Street Journal (10/7, B1, Bussey, Subscription Publication) similarly reports that wage pressures and shipping costs, on top of the potential impact of the Senate Chinese currency bill, are contributing to the flow of jobs from China back to the US. The Journal notes that it could result in 800,000 jobs in the manufacturing sector, and up to three million when including service sector jobs. The Journal adds that the flexibility of US unions has partially contributed to a more attractive labor and manufacturing environment in the US.
The CBS Evening News (10/6, story 9, 2:30, Axelrod) also reported that online retailer Zappos “is bucking the national trend and hiring 3,000 workers for its busy Christmas season. So far they’ve received 44,000 applications for jobs starting at $8.25 an hour.”

Sharp Rise in U.S. Health Insurance Cost, Study Finds

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By REED ABELSON
Published: September 2011
A new study by the Kaiser Family Foundation, a nonprofit research group that tracks employer-sponsored health insurance on a yearly basis, shows that the average annual premium for family coverage through an employer reached $15,073 in 2011, an increase of 9 percent over the previous year.
The cost of health insurance for many Americans this year climbed more sharply than in previous years, outstripping any growth in workers’ wages and adding more uncertainty about the pace of rising medical costs.

“The open question is whether that’s a one-time spike or the start of a period of higher increases,” said Drew Altman, the chief executive of the Kaiser foundation.

The steep increase in rates is particularly unwelcome at a time when the economy is still sputtering and unemployment continues to hover at about 9 percent. Many businesses cite the high cost of coverage as a factor in their decision not to hire, and health insurance has become increasingly unaffordable for more Americans. Over all, the cost of family coverage has about doubled since 2001, when premiums averaged $7,061, compared with a 34 percent gain in wages over the same period.

How much the new federal health care law pushed by President Obama is affecting insurance rates remains a point of debate, with some analysts suggesting that insurers have raised prices in anticipation of new rules that would, in 2012, require them to justify any increase of more than 10 percent.

In addition to increases caused by insurers getting ahead of potential costs, some of the law’s provisions that are already in effect — like coverage for adult children up to 26 years of age and prevention services like mammogram screening — have contributed to higher expenses for some employers.

The Kaiser survey includes both big and small companies using employer-sponsored coverage representing about 60 percent of all insured Americans of working age. The annual growth in premiums, according to the survey, had slowed in recent years to 5 percent, rising just 3 percent in 2010, in part due to the lingering effects of the recession. After years of double-digit increases, the moderation was a welcome relief.

The unexpected increase in premiums raises questions about whether health care costs are, in fact, stabilizing at all, as people have postponed going to the doctor or dentist and have put off expensive procedures. “No one quite knows,” said Mr. Altman.

Throughout this year, major health insurers have defended higher premiums — and higher profits — saying that their expenses would rise once the economy recovered and people believed they could again afford medical care. The struggling economy will probably keep suppressing demand for medical care, particularly as people pay a larger share of their own medical bills through higher deductibles and co-payments, according to benefits consultants and others. About three-quarters of workers now pay part of the bill when they go see a doctor, and nearly a third have a deductible of at least $1,000 if they have single coverage, up from just one in 10 in 2006, according Kaiser.

Although demand for care appears to be growing relatively slowly, insurers and benefit consultants also say prices for medical care continue to climb as prescription drug makers and hospitals charge more. “If they’re a popular brand or anchor hospital, they’re going to negotiate a significant increase if they can,” said Edward A. Kaplan, a benefits expert with the Segal Company, which recently surveyed insurers about medical costs.

The question for employers and insurers is whether the lackluster economy, as well as recent efforts by employer and insurers to better manage the medical care of workers, will keep premiums increasing at a more moderate level. Early responses to a survey by Mercer, a consulting firm, suggest employers are expecting the cost of providing health benefits to go up about 5 percent next year, according to Beth Umland, Mercer’s director of research for health and benefits. These companies may be factoring in the more pessimistic view of the economy, she said, where any recovery seems further off than it did a few months ago.

Employers are reporting that their workers are using less medical care, said Ms. Umland, but they and insurers have been slow to estimate costs that reflect the lower demand. “It always takes a while for underwriting to catch up with reality,” she said.

Family coverage is now running $12,000 a year, Ms. Gombos said, and she is waiting to see what rate increases her insurer proposes for the coming year. She thinks premiums will not rise as sharply in 2012. “What it comes down to is we’ve had some good luck,” she said.

Some small business say they expect their premiums to moderate, but only because of changes in their work force — partly caused by younger, healthier employees — that make it less likely that the companies will incur high medical claims. “Up until last year, we saw very hefty increases — double digits,” said Heather Gombos, an executive for R. M. Jones & Company and affiliated businesses in New Britain, Conn. , a group that insures about 50 of its 80 employees.

Some businesses say they anticipate relief from higher costs in the coming year for a variety of reasons. At Ogilvy & Mather, the New York advertising firm, the company believes its efforts to encourage wellness and better oversee its employees’ health through an on-site medical clinic are paying off. “We are not anticipating any cost increase for employer and employee,” said Gerri Stone, the senior partner who oversees the firm’s benefits strategy.

Ms. Stone acknowledged that the composition of the firm’s 3,600 employees has helped it avoid some of the sharp increases experienced by other businesses. “We’ve never gone into the double digits,” she said. Family coverage runs about $16,000 a year, she said.

Insurers and benefits consultants say, however, it is difficult to predict whether health care demand will again take off when the economy rebounds or whether some other factor is at play. “We’ve seen a moderation in the increase in health services, particularly in discretionary services,” said Tom Richards, an executive with Cigna. While he attributes some of the moderation to the poor economy, he says the increase in cost-sharing by employees and programs that more closely monitor their health could be having a more permanent impact.
The question, he said, is “what is the economy going to be and what is the new normal.”

Obama administration officials argue that new regulations are forcing insurers to be more circumspect about raising rates. Insurers seeking to raise premiums next year by more than the 10 percent maximum will have to publicly justify their rate increases, and the new law requires the companies to spend at least 80 cents of every dollar they collect in premiums on medical care. If they end up taking too much in premiums, they will have to refund the money to consumers.

But employers and others say much more still needs to be done to control overall costs, especially when workers’ wages are essentially flat. Of the $15,073 in average premiums paid for family coverage, Kaiser found that employees paid $4,129 towards the cost, in addition to whatever out-of-pocket costs they shouldered.

“We’re going to continue to have this yawning gap,” said Helen Darling, the chief executive of the National Business Group on Health, which represents employers that provide health coverage to their workers. Health care costs continue to climb much faster than overall inflation, she noted.

“The health economy acts as if it’s a boom economy,” she said.