Employees To Shoulder Bigger Piece Of Health-Care Costs

Jan. 13, 2005
Three straight years of health-care costs increases in the U.S. that have been twice the rate of inflation have convinced many employers that it is time -- despite the war for talent -- to pass on some of those cost increases to employees. A recent study ...

Three straight years of health-care costs increases in the U.S. that have been twice the rate of inflation have convinced many employers that it is time -- despite the war for talent -- to pass on some of those cost increases to employees. A recent study by consulting firm William M. Mercer Inc. found that 40% of companies plan to increase the amount that employees must contribute to health care in 2001, compared with just 19% the year before. In addition, 17% of the companies surveyed plan to raise deductibles, co-payments, or out-of-pocket maximums; only 9% did that in 1999. "Attraction and retention of employees is still a big issue," says Mercer health-care consultant Blaine Bos. "But controlling runaway expenses takes priority." The largest companies -- those with 500 or more employees -- are the most likely to shift more costs to employees, says Bos. Indeed, 58% of large companies said they will raise employee contribution levels in 2001, and 26% of larger companies said they will make changes in cost-sharing provisions in order to push more of the costs onto employees.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!