2021 Employer Insurance Trends; Shaky Social Security Benefit Projections

Employee health insurance will cost a bit more next year and, save for some pandemic tweaks, will look much like it has in recent years.

Surveys taken by Mercer, an employee benefits and consulting firm, and the National Business Group on Health, which represents big-employer plans, concur on these trends:

Rates will rise between 4 and 5 percent, and the typical employer plan will continue to pay 70 percent of the total insurance bill. Check with your plan during this fall’s open enrollment season for 2021 coverage details.

The rise in digital and telehealth services will continue, with many plans boosting virtual mental-health services to acknowledge the substantial rise in depression, anxiety, and drug abuse associated with the continued health and economic damage caused by COVID-19.

Big-employer plans will expand their use of onsite clinics and centers of excellence — high-quality health providers around the country who offers superior care at reasonable prices.

“Many employers are adding new resources to support and engage employees in the COVID era,” Mercer’s outlook said. “At the top of the list: virtual office visits and other digital healthcare resources . . .  such as telemedicine for episodic care, artificial-intelligence-based symptoms triage, ‘text a doctor’ apps and virtual office visits with a patient’s own primary care doctor.”

In 2020, according to a study by Kaiser Family Foundation, “the average annual premium for single coverage rose 4 percent, to $7,470, and the average annual premium for family coverage also rose 4 percent, to $21,342. Covered workers, on average, contributed 17 percent of the cost for single coverage and 27 percent of the cost for family coverage.”

Roughly 157 million people were covered by employer plans before the pandemic triggered widespread job losses. Many who have lost coverage were expected to enroll in Medicaid but specific numbers are not yet available.

Shaky Social Security Benefit projections

The Social Security Administration recently released an internal briefing paper that documents what most experts have long said – the agency’s benefit projections are often not accurate, especially for younger workers decades from claiming benefits. Briefing papers are not official SSA policy but evidence-based research to help senior agency managers. Here’s a table showing the wide variation of statement projections to actual benefits.

Age     Percentage of projections accurate to within 

            5%       10%     15%     20%     25%

25        7          14        20        27        32

30        14        25        34        41        46

35        23        38        45        50        55

40        31        45        54        61        65

45        40        57        66        73        77

50        55        71        79        84        87

55        74        86        90        92        93

The low percentages of many benefit projections in the table can mislead people. If your younger than 55, in particular, the odds are very high that your statement’s retirement projections sharply underestimate the actual benefits you will later receive. This is a big deal.

Researchers tried and failed to find a more reliable projection methodology. They concluded:

“We recommend enhancements to the benefit-estimating tools available online via the my Social Security portal, including permitting uninsured workers’ access to the portal, and increased capability for existing interactive calculators. Providing access to a benefit estimate for uninsured workers based on future covered work would allow workers with less than 40 credits to see the impact of continued covered work on becoming fully insured for benefits in the future. Expanding the flexibility of the interactive benefit calculators may improve the accuracy of the benefit estimates for workers whose knowledge of their current and future work situations may be better than SSA’s assumptions and so may be best suited to enter accurate expected future earnings and claiming-age variables.”

You can find your projected benefits in your My Social Security online statement. If you don’t have one, create it. It’s essential to informed retirement planning – essential, but often inaccurate. The message here is to not passively accept the accuracy of your statement.