Human Capital & Careers

More Health-Care Costs: Pass It Down

Due to cost-shifting, 2006 may be the third straight year that employers would see their total health-care spending slow down.
Stephen TaubSeptember 13, 2005

Companies are bracing for another double-digit increase in health care costs in 2006. And in keeping with a recent trend, they’re planning to pass along part of the costs to the rank and file.

In fact, a survey of more than 1,800 companies by Mercer Human Resource Consulting found that the companies themselves expect to shell out only about 6.4 percent more for health-care costs next year than in 2005, according to the Associated Press. This would be the third straight year that employers would see their total health-care spending slow down, the wire service added.

“Employees are bearing more of the costs because double-digit increases are unsustainable,” Blaine Bos, a health care consultant for Mercer, reportedly stated. Cost-shifting is requiring employees to pay higher deductibles, premiums, and co-payment fees while offering them fewer choices of insurance plans, according to Mercer.

Two-thirds of companies with more than 500 workers intend to shift costs to employees, compared with about one-third of companies with fewer than 500 workers, according to reports of the Mercer survey. “Small employers also have less flexibility to tinker with plan design,” Bos reportedly said. “They’re most likely to shop around for a cheaper plan.”

Employers themselves wound up paying 7.5 percent more for health-care costs in 2004 than they did the prior year, noted the Associated Press, despite cost increases that had been forecast to come in at nearly 13 percent.

4 Powerful Communication Strategies for Your Next Board Meeting