The nation's employers are struggling with close to double-digit increases in health-care costs in 2006, and consequently will be shifting...
NEW YORK — The nation’s employers are struggling with close to double-digit increases in health-care costs in 2006, and consequently will be shifting more of that burden to their employees, according to a new survey of more than 1,800 firms.
The preliminary survey, released yesterday by Mercer Human Resource Consulting, found that employers anticipate an almost 10 percent increase in health-care costs next year, about three times the rate of general inflation, if they leave benefits unchanged.
But companies that were polled in the survey — both those that purchase insurance and firms that are self-insured — are only earmarking an average increase of 6.4 percent in their spending. That will mark the third consecutive year that employers are seeing their actual health-care costs slow as they pass on more of the costs to their workers.
“Employees are bearing more of the costs because double-digit increases are unsustainable,” said Blaine Bos, a Minneapolis-based health-care consultant for Mercer.
To keep a lid on costs, Bos said, many employers are using a tactic called cost shifting, which demands employees to pay higher deductibles, premiums and co-payment fees. Employers are also limiting workers’ choice of insurance plans.
“We used to think of cost-shifting as something you could do only every so often,” Bos said. “But we’re seeing a new willingness on the part of employers — born of desperation — to shift cost in successive years to achieve acceptable cost increases.”
Mercer said that employers had forecast a 10 percent increase in health-care costs in 2005 — if they left benefits unchanged, but that figure should be closer to 7 percent, as employees bear more of the costs.
Two-thirds of the large employers surveyed said they would shift cost to employees.
With costs rising more slowly for small employers, a smaller percentage — 35 percent — said they would shift costs to employees in 2006.
The final results from about 3,000 companies are expected by the end of the year, a Mercer spokesman said.