Towers' 2010 Health Cost Hike Prediction: 7%

October 9, 2009 (PLANSPONSOR.com) - The latest survey of health coverage cost hikes predicts a 7% increase for 2010 over 2009, with 78% of the cost being borne by employers.

A Towers Perrin news release said employers in 2010 are expected to pay $7,920 of the anticipated $10,212 annual per-employee health cost.Employee contributions to health care premiums will rise by about 10% in 2010, the report said, compared with the 8% increase seen in 2009.

The Towers Perrin report asserted that the 2010 health care picture includes a growing “affordability gap” caused by the fact that many employee salaries are down, bonus programs have been cut back, and retirement savings accounts declined with the down market.

“For employees, the affordability challenges associated with this year’s cost increases are even more acute than the general survey numbers suggest,” Dave Guilmette, managing director of Towers Perrin’s health and welfare practice, said in the news release.

High Performers

The survey found that high-performing employer programs – those successful at managing costs and meeting other health-care coverage goals – plan to expand employee incentive programs through 2012, such as health risk assessments, which 51% of respondents said they currently offer, and health promotion programs such as weight control and smoking cessation, which currently are offered by 37% of respondents.

By 2012, however, the survey found that 61% of employers plan to offer health risk assessments, and 54% anticipate beginning health promotion programs.

Other steps high-performing employers are taking to keep costs down include offering onsite biometric screenings (42% of respondents currently do so; 71% expect to do so by 2012); promoting health foods (34% today; 52% by 2012); and offering onsite health services (20% today; 30% by 2012). By 2012, 71% of high-performing respondents said they plan to have health advocates to manage employees’ chronic conditions or serious illnesses, and 64% said they plan to offer lifestyle coaching.

The survey was conducted in August and September 2009 among 300 large employers with operations in multiple locations in the United States.

More information is available here .

«