Health benefit costs rose at a greater rate in Virginia than in the nation in 2009, new research indicates.

Total health benefit costs for workers in Virginia increased 7% in 2009, to an average of $8,881 per employee, according to the annual Mercer National Study of Employer-Sponsored Health Plans.

Nationally, employers’ costs rose by 5.5% last year, the lowest increase in a decade, as large employers added health management programs and small-business owners shifted employees to account-based high-deductible plans, according to Mercer. A total of 110 employers headquartered in Virginia were included in the state results.

For 2010, survey respondents in Virginia estimated that if they made no changes to their current plan, costs would rise by 8.3%. But they expect to lower their cost increase to 5.7% by making changes to plan design and/or plan vendors, Mercer reported.

Employers shifting costs

In Virginia, 37% of respondents say they will shift costs to their employees in 2010 by raising deductibles, copays/coinsurance or out-of-pocket maximums.  One third of respondents in Virginia say they will increase employees’ share of the premium contribution, and 19% will increase employee cost-sharing some other way.

Some means of lowering costs are already in place. In Virginia, 17% of respondents offered a consumer-directed health plan with a Health Savings Account feature and 6% of respondents offered a CDHP with a Health Resources Account feature in 2009.

Exactly 25% of survey participants in Virginia say they are very likely to offer an HSA or HRA in 2010, including those that already offer a CDHP.
The average employee in Virginia paid $99 a month for employee-only coverage for a PPO/POS plan, $82 monthly for an HMO and $60 monthly for a CDHP, Mercer found.

Nationally, PPO deductibles rose sharply in 2009, with the average individual deductible for in-network services reaching nearly $1,100. Regionally, employers in the South reported a median PPO in-network deductible of $1,000.

This story originally appeared in the January 2010 print edition of Insurance & Financial Advisor.