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Employers paying 10% more for health care, survey finds

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NEW YORK -- Employers' health care costs are up 10 percent this year, but companies have limited the increase by more closely monitoring their workers' health, according to a new survey of more than 550 companies.

The rise in employer health bills has slowed from a 12 percent increase in 2004. But the newest jump still extends a string of double-digit increases in recent years, according to the survey by benefits consulting firm Watson Wyatt Worldwide and the National Business Group on Health, an employer group.

Increases in employer health care costs have slowly eased since soaring by about 18 percent in 2001, but are still far outpacing the overall rate of inflation.

In the past few years, many employers have kept a lid on their expenses by shifting a larger portion of health care costs to their workers. That is still taking place, but somewhat less so than in the past, the survey found.

Meanwhile, many companies have stepped up efforts to monitor employees illnesses and to try to change unhealthy behavior, in order to control costs, said Ted Chien, global director of group and health care consulting for Watson Wyatt.

"It's really less about cost shifting and its really more about focusing on the health of the work force," Chien said.

About 95 percent of the firms surveyed are now using disease management programs -- closely tracking workers' illnesses and care -- up from 57 percent in 2003.

Employers have also embraced behavior change programs, encouraging workers to undergo basic health screening, and outlining actions they can take to correct problems with weight, blood pressure and other issues. The number of employers with such programs nearly doubled last year, to 68 percent.

About a third of the employers are focusing on obesity reduction among workers, up from 14 percent in 2003.

Most employers are raising workers' health premiums in direct proportion to the overall increase absorbed by the company, Chien said. But employers are less inclined to shift a greater share of the load to workers. The survey found 41 percent of companies are somewhat more willing to absorb cost increases in 2005, up from 29 percent last year.

The survey tapped 555 employers with at least 1,000 workers, with information gathered late last year and January of this year. It is not a representative sample of all employers, but reflects the experience of the nation's largest companies, Chien said.

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