Cost-Sharing Burden Continues To Rise For Employees

By Cyril Tuohy

InsuranceNewsNet

The average cost for health care per active employee working for large employers is expected to reach $12,136 in 2013. This is a 5.1 percent increase from 2012 as companies manage health care costs and work to make employees more accountable, according to a new survey.

Employees’ share of the total health care premium increased 8.7 percent between 2012 and 2013, with the dollar burden rising from $2,658 to $2,888 over the same period, according to the 18th annual 2013 Towers Watson/National Business Group on Health “Employer Survey on Purchasing Value in Health Care.”

Compared with five years ago, employees are contributing 42 percent more to cover the cost of health care, with employers kicking in 32 percent more.

“While U.S. employers remain committed to health care benefits for active employees over the next five years, they are redefining their financial commitment in the short run and are more reluctant to commit to coverage for employees over a longer period,” the authors of the report wrote.

Employee out-of-pocket expenses are up 15 percent over the last two years, and the employee share of the total cost, including premiums and out-of-pocket costs, has climbed from about 34 percent in 2011 to 37 percent in 2013, the survey found.

The share of premiums paid by employees now stands at 23.8 percent, up from 22.5 percent five years ago, and more than 80 percent of respondents plan to continue to raise the share of premiums paid by employees.

Surcharges for spouses are also growing, the survey found, with 20 percent of respondents using them now and another 13 percent planning to do so next year.

Despite the continued shift of the health care cost burden to employees, 85 percent of companies said the strategy would remain in place over the next five years. Only about one in four respondents (26 percent) was confident that they would be offering group health care benefits 10 years from now, the survey found.

The survey encompassed 583 employers each employing at least 1,000 people. A total of 8.5 million employees were enrolled in the health care coverage offered by the 583 employers.

Cyril Tuohy is a writer living in Pennsylvania. He has covered the financial services industry for more than 15 years. He has also written about food, restaurants and travel. He can be reached at Cyril.tuohy@innfeedback.com.

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.