Employers See Lower Health Care Cost Increases in 2008

June 17, 2008 (PLANSPONSOR.com) - Preliminary results for Compdata Surveys' Compensation Data 2008 annual survey shows the average heath insurance premium increase for employers was 7.2% among all plan types this year, compared to 11.1% in 2007.

A Compdata press release said health insurance premiums for employer have been increasing at a lower rate over the last five years.

In 2008, 68.2% of companies offering Preferred Provider Organization (PPO) plans saw an average increase of 7.3%. Those offering Health Maintenance Organization (HMO) and Point of Service (POS) plans had average premium increases of 7.5% and 7.4%, respectively, according to the press release. High Deductible Health Plans (HDHPs) had an average increase of 5%.

“Less than 50% of the organizations offering HDHP plans had a health insurance premium increase in 2008,” said Amy Kaminski, manager of marketing programs for Compdata Surveys, in the release.

Methods used in 2008 by U.S. employers to contain health benefit costs included:

  • Coordination of benefits (70.5%),
  • Wellness programs (69.8%),
  • Use of a network of health care professionals (65.1%), and
  • Increasing the employee share of premium costs (37.5%).

The survey found 28.4% of employers increased employee deductible levels in 2008, and 15.9% of organizations increased employee co-insurance levels. On average, employers contribute 10% of payroll toward the cost of health care.

The Compensation Data 2008 survey contains data on 637 job titles, and includes information from millions of employees across the U.S. For further information, contact Lane Odle at lodle@compdatasurveys.com .