Public Employers Also Turning to Health Care Cost Sharing

May 29, 2009 ( - Public employers nationwide are modifying their employee health care benefits to include more cost-saving measures, according to a recent survey conducted by the International Foundation of Employee Benefit Plans (IFEBP).

An IFEBP press release said the survey found that 72% of public employers are increasing or considering an increase in their employees’ deductibles, coinsurance or copays. In addition, 74% of public employers are increasing or considering an increase in employee premiums.

Nearly half of public employers cited the financial crisis as the reason for considering higher deductibles (46%) and as the reason they are thinking about higher employee premiums (45%).

The survey also found public employers are adding a consumer-driven health plan (31%), shifting to a self-funded plan (26%), and introducing spousal surcharges (20%), according to the press release.

Nearly three-fourths of public plan sponsors (72%) are placing more emphasis on controlling prescription drug costs. The majority of public employers are expanding participant education about drug options and costs (74%), increasing copayments and/or coinsurance for drugs (61%) and mandating the use of generic drugs (54%). Nearly a quarter emphasized that they are taking these measures specifically because of the financial crisis.

“These findings are surprising, although cost-sharing measures have been common in the corporate world for quite some time, public employers have traditionally not modified their health care plans in this direction,” said Sally Natchek, Senior Director of Research at the Foundation, in the announcement. “The fact that the majority of public employers are now increasing deductibles, copays and premiums illustrates the dual effect rising health care costs and the financial crisis are having on their plans.”

Health Care Plans: Impact of the Financial Crisis(Item #6696E) is available to IFEBP members free of charge. Nonmembers can purchase the survey for $50. To order visit , email , or call (888) 334-3327, option 4.