HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

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Wednesday, September 14, 2005

Cost of Health Benefits Increasingly Shifted to Employees

ModernHealthCare.com reports that the rate of growth of health insurance costs is expected to slow for a third straight year in 2006, but only because employers continue to cut benefits and shift more of the costs to employees.   Mercer Human Resource Consulting conducted the survey of 1,883 firms.  The survey found that employers would expect average rate increases of 10% next year if they were to leave their current health plans unchanged.  But after making plan design changes, they expect actual costs to rise only 6.4%. In addition, 62% of large employers and 35% of small employers said they planned to shift more costs onto employees.   Final survey results will be released at the end of the year. 

I've seen employers shift from sliding-scale benefits packages with different levels of subsidies for employees' choices (indemnity (almost unheard of any more), PPO, HMO) to across-the-board HMO plans, leaving employees who opt for PPO coverage (in order to stick with a particular physician, for example) to pay for 100% of the difference out of their own pockets.  In some cases, there's a credible case to be made that, but for the down-grade in employer participation, some companies would have to forgo health insurance benefits altogether.  In a less than robust economy, these are the kinds of choices that are being made all the time. 

Thanks to Lindley Bain for help with this one. [tm]

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