Survey: Employers Shift Health Costs to Workers at Higher Rate This Year
Employers are shifting health insurance costs to employees at a higher rate this year partially because of elevated unemployment rates and a weak economy, according to a new survey by the Kaiser Family Foundation and the Health Research & Educational Trust, the Washington Post reports (Hilzenrath, Washington Post, 9/2).
The organizations surveyed about 2,000 large and small companies between January and May of this year (Johnson, Wall Street Journal, 9/3).
Premium Increases for Workers
According to the survey, premiums for employer-sponsored coverage paid by both workers and employers increased by an average of 3% for family coverage and 5% for single coverage this year.
The survey noted that although the cost increases were small, much of the burden fell on workers. It found that employees paid 30% of the premiums for family coverage and 19% of the premiums for single coverage this year, the highest worker contribution levels in 12 years.
According to the survey, worker shares of premiums for employer-sponsored family coverage increased by an average of 13.7% this year, while employer contributions to such plans dropped by 0.9%. Workers are paying an average of $3,997 annually for family coverage this year, up $482 from last year, while employers are contributing an average of $9,773 annually, $87 less than last year.
The survey also found that premiums for single coverage increased by an average of $225, with workers covering more than 50% of the increase.
Employers Making Changes
Thirty percent of employers that offer healthÂ insurance reported that they reduced benefits and increased the workers' copayments and deductibles this year because of the economy, according to the survey.
In addition, the survey found that more businesses are offering high-deductible insurance plans. This year, 27% of workers with health benefits have annual deductibles of at least $1,000,Â up fromÂ 22% of workersÂ last year (Washington Post, 9/2). Businesses defended shifting the cost burden as a way to keep from cutting staff (Wall Street Journal, 9/3).
Implications of National Health Reform
Health experts disagree about how the federal health reform law will affect employer-sponsored health insurance. The law was designed to help U.S. residents who lack insurance through their jobs, and it largely preserves the existing employer-based coverage system (Levey, Los Angeles Times, 9/2).
Helen Darling, president of the National Business Group on Health, said companies expect insurance costsÂ to increase when more reform provisions take effect, because the law requires employers to provide more benefits. She predicts that more employers will change the way they provide health insurance and might opt to contribute a fixed amount rather than maintain certain coverage levels.
However, White House Office for Health Reform Director Nancy-Ann DeParle said the reform law contains many initiatives that likely will helpÂ employers better afford insurance, such as $40 billion in tax credits for small businesses and $5 billion to aid companies in paying for retiree health benefits. She also noted that theÂ latest rise in premiums was "the lowest increase in many years" (Abelson, New York Times, 9/2).
The new survey shows that "employers shifted virtually all of the increased premium costs to their hapless workers, who were in a weak position to resist in an economy where there were few other jobs to jump to," a New York Times editorial states. It continues, "[F]or now, the nation's economic woes and high unemployment rate suggest that burden-shifting will continue" (New York Times, 9/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.