Kaiser Charts Employer Health Care Cost Hikes

March 14, 2008 (PLANSPONSOR.com) - Employer-provided health care benefits costs climbed to an average $2.59 hourly in 2005 - almost $1 more than six years earlier, according to a new study.

A Kaiser Family Foundation news release about its study of employer payroll and health benefits costs data saidthe median cost to employers of employee health care coverage as a share of payroll rose from 8.2% in 1999 to 11% in 2005. The study found that half of all employees who had access to coverage in 2005 worked for employers that contributed at least 11% of payroll costs towards health insurance, according to the study.

Employer health insurance costs for employees in lower-paid occupations (such as sales, services, and laborers) were smaller in hourly dollar amounts compared to that for employees in higher-paid occupations (such as professionals, executives, and technicians), Kaiser said. Larger establishments had greater health benefit costs, both on an hourly basis and relative to payroll costs, even though their payroll costs were also greater.

On an hourly basis, employee health insurance cost at least $2.31 for half of all employees in 2005.

The Kaiser study , “Employer Health Insurance Costs and Worker Compensation,” analyzes data from the National Compensation Survey, which is a nationwide survey of labor costs in private and public establishments conducted quarterly by the Bureau of Labor Statistics.