Employees To Shoulder Bigger Piece Of Health-Care Costs

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.