Health Plan Renewal Time: 2008 Employee Health Care Costs Expected To Exceed $9,300 Per Employee
The average corporate health benefit expenditure in 2008 will be $9,312 per employee—an increase of 7 percent over 2007—with annual per-employee contributions exceeding $2,000, according to Towers Perrin’s 2008 Health Care Cost Survey. Some highlights of the survey are as follows:
- Employers are expecting to subsidize 78 percent of next year’s premium costs, and employees will have to cover the remaining 22 percent, plus usage-based co-pays, deductibles and co-insurance.
- Employee contributions, on average, will jump by $156 per employee per year to $2,040, an 8 percent increase that is roughly twice that of annual employee merit increases.
- Analyzing the data by coverage level, the average reported 2008 cost of annual medical coverage will be:
- Employee-only coverage: $4,704
- Employee-plus-one coverage: $9,660
- Family coverage: $13,704
The Towers Perrin Survey also tracks the cost variations across “High-Performing” and “Low-Performing” Companies noting a cost disparity per employee per year of $8,844 and $10,320 which is explained as follows:
According to the Towers Perrin data, these [high-performing] companies have clear strategies in place to drive improvements in employees’ overall health and wellness, engagement in health care decisions and health-related behaviors, as well as to identify problems early and take advantage of opportunities for improvement by understanding the current state of their benefit program and the health care system overall.
To the extent that high performance is enhanced by plan design, I am seeing a strong trend to High Deductible Health Plans coupled with either Health Savings Accounts, Medical Savings Accounts or Health Reimbursement Arrangements. The pros and cons of some of these arrangements have been discussed previously in Problems with Health Savings Accounts (HSA).
There is also a clear trend among employers to adopt wellness programs with financial incentives for behavior changes. Some of the issue surrounding wellness programs have been discussed in Wellness Programs Must Comply with HIPAA Restriction;Successful Wellness Programs Implemented by D&E Communications; Sizing Up Obesity: Can Wellness Programs Curb BMI?