Bucks Blog: Workers’ Share of Health Costs Is Likely to Continue Rising

Towers Watson/NBGH

Workers are paying a greater share of their health care costs, and that trend is likely to continue over the next several years, a new report on employer-based health plans finds.

Employers still bear most of the cost of workplace health plans. But employees contribute 42 percent more for heath plan coverage than they did five years ago, as against a 32 percent increase for employers, according to the study from the benefits consultant Towers Watson and the National Business Group on Health, a nonprofit industry group whose members are large employers concerned rising about health care costs. (This change is shown in the graphic above.)

Meanwhile, though, the share of the total cost of health care borne by employees, including both premiums and costs paid out-of-pocket, climbed to 37 percent in 2013, from 34 percent in 2011, the report found.

Annual salary increases, meanwhile, have averaged less than 2 percent percent over the last three years, so workers are losing ground. “From a total rewards perspective, ” the report concludes, “rising health care contributions are taking their toll on employee take-home pay.”

The report is based on an e-mail survey, conducted from November through January, that questioned benefits managers at 583 employers about their health care benefits. The participants collectively employ about 11 million full-time workers.

The majority — about 80 percent — of employers said they planned to continue to raise the share of premiums paid by employees over the next three years.

Employees paid, on average, about 23 percent of total premium costs last year, and are expected to pay nearly a quarter in 2013, as companies take steps to control their costs. In terms of paycheck deductions, this translates into an average employee contribution of $2,658 to premiums in 2012. That is expected to rise to $2,888 in 2013 — an increase of nearly 9 percent in one year.

How do you expect to deal with the increase in health care premiums and out-of-pocket costs?

Article source: http://bucks.blogs.nytimes.com/2013/03/07/workers-share-of-health-costs-is-likely-to-continue-rising/?partner=rss&emc=rss