Employers Work to Reduce Corporate Health Care Costs

June 24, 2011 (PLANSPONSOR.com) - A recent survey conducted by HR Daily Advisor investigated how employers are attempting to lower their health care bills, often by shifting more costs to employees.  

The survey found that 84% of respondents took at least one step to reduce their health care costs in the previous year, and roughly two-thirds plan further action in the coming year.  

The top three corporate actions taken were:   

  • Raising the portion of health care premiums for exempt (54%) and non-exempt (56%) employees; 
  • Raising copayment for exempt (42%) and non-exempt (47%) employees; and 
  • Raising deductible for exempt (46%) and non-exempt (51%) employees. 

Nearly one-third implemented wellness programs, and roughly 30% offered health savings accounts (HSAs) and/or health reimbursement accounts (HRAs). Another 15% conducted dependent audits, and 10% of respondents reported reduced contributions to dependent audits.  

The least popular options were structuring employee premiums on ability to pay or percent salary, introducing managed care programs, discontinuing coverage for retirees and part-time workers, and offering opt-out incentives, all of which were chosen by less than one in ten of respondents.  

 Other major findings included: 

  • 99% of employers surveyed offer health insurance to their employees; 
  • 35% reported that the 2010 cost per employee of legally required benefits (Social Security, Medicare, Unemployment, and Workers’ Compensation) fell between $5,000 and $10,000; 23% reported costs of more than $10,000 per employee; 
  • Nearly half (46%) reported that their 2010 health insurance costs per employee was between $5,000 and $10,000, and another 18% reported costs greater than $10,000. 

The survey was conducted in May, 2011, and received 338 responses primarily from HR managers from a mix of industries, with more than half from manufacturing and construction. Respondents were geographically spread across the US, with about three-quarters of respondents employing 499 or fewer. 


-Sara Kelly