Sick Stuff: Health-Benefit Costs Up Big Next Year

The party’s over…or winding down for employees with sweetheart health insurance packages.

Employers expect their health-care costs per employee to rise by 12.7 percent in 2002, according to a recent survey of 2,800 large and small companies by William M. Mercer. This would come on top of an 11.2 percent hike in 2001–and would raise the cost of an average corporate medical-plan to $4,924 per worker.

Ominously, some companies expect their costs to jump as much as 20 percent, according to the survey. And how are companies plan to cope with the those premium premiums? Well, 40 percent said they will require their employees to pay a higher share of the total cost by increasing the deductibles and co-payments. At least one major health insurer, Humana, is trying to get its own employees to choose high-deductible plans. See “Dawn of the Jumbo Deductible.”

Indeed, the median in-network deductible for preferred-provider plans (PPOs) rose to $500 from $250, among small employers, according to the survey.

About 16 percent of employees at small companies pay deductibles that exceed $1,000, says the survey.