Companies to Workers: Pay More for Health Insurance
Specifically, annual premiums for employer-sponsored plans grew to $2,650 for single coverage and $7,053 for family coverage from the spring of 2000 to the spring of 2001, according to the study.
Cost Shifting
This year’s price hike has employers thinking about shifting more of the cost to employees – a prospect more palatable since the red-hot job market has cooled, making it more difficult for workers to jump ship should they be upset by changes in benefits.
According to the study released Thursday, 44% of companies were either “very likely” or “somewhat likely” to increase employee premium costs in the next year. Workers pay an average of $30 a month for single coverage and $150 a month for family coverage.
“It is interesting to see how quickly you can see the effect of rising premiums in a slowing economy,” said Larry Levitt, co-author of the study and vice president of the Kaiser Family Foundation. “The time of increases in health care costs being offset by employers has come to a screeching halt.”
No Go
Meanwhile, the rising costs are causing fewer companies to offer health benefits. From 1998 to 2000, the percentage of companies offering health benefits grew from 55% to 67%, according to the Kaiser study. This year, the percentage dropped to 65%.
Levitt said once companies start offering insurance, they rarely drop it. Yet, he fears as small businesses offering health insurance close because of the economic slowdown, they will be replaced by other small companies who don’t offer the option.
The trend of shifting the cost of health care to the worker has already taken root in some companies. For example, the average deductible for an employee choosing a doctor outside the network in a preferred provider organization grew from $361 last year to $407 this year. Co-payments for prescription drugs increased to $20 this year from $16 last year.
The survey covered 2,734 companies.