Human Capital & Careers

Employers Face Rate Health-Plan Hikes of 13 Percent to 16 Percent: Consultants

Next year will mark the biggest cost boost since the early 1990s, Hewitt Associates estimates.
CFO.com StaffOctober 30, 2001

Depending on the type of plan they have, U.S. employers will face average increases of 13 to 16 percent in their health-plan costs for 2002, consultants at Hewitt Associates say.

That will mark the fourth year in a row of major health care hikes and the highest boost since the early 1990s, according to a release issued yesterday by the Linconlnshire, Ill.-based firm.

Some employers will foot the bill for most of next year’s rate hike, but many will pass along at least 25 percent to 30 percent of the increase to employees, according to the release.

With Hewitt projecting that the average health plan will cost $5,524 per employee next year, up from $4,778 in 2001, that means employees will pay between $186 and $463 more for their health coverage in 2002.

The firm estimates that employers will be hit with average 2002 cost increases of at least 13 percent for preferred provider organizations (PPOs) and point-of-service (POS) plans, 15 percent for traditional indemnity plans, and 18 percent for health maintenance organizations (HMOs).