Mercer brings us this evidence in their new health cost survey, to be published in March 2008.
The consultancy found that health costs increased 6.1%, equivalent to 2006 cost increases. This equated to $7,983 per employee. The forecast for 2008 is a 5.7% health cost price increase.
These cost increases are outpacing wage increases.
More small employers – where job growth is – are exiting health coverage, according to Mercer. The percentage of small employers (defined as those with fewer than 200 employees) covering health for employees fell from 66% in 2002 to 61% in 2007.
Mercer contents that employers’ adoption of consumer-directed health plans (CDHPs) is slowing the rise of health care costs. Cost-shifting to employees is expected to continue at roughly 10-11% increases.
In 2007, CDHP health costs averaged $5,970 per employee, compared to $7,120 for HMOs and $7,352 for PPOs.
For part-time workers, Mercer found that just 62% of large employers provide some type of health coverage. The growing trend here is to offer “mini-med” health plans which limit the total health benefits each year. These are offered by 7% of all large employers – and 19% of employers in the wholesale/retail sector — to part-time workers.
Speaking of the retail sector, Wal-Mart has recently attracted some negative attention for its health plan. While the company was promoting the fact that it was expanding access to its plan, a watchdog group contends that many part-timers are still excluded from coverage in the first year of working at the mega-retailer. The Center for a Changing Workforce points out, “Given that Wal-Marthas anywhere from 30 to 50% turnover per year, half of the employees will never get healthcare insurance.”
The Center found that Wal-Mart’s most affordable plan with a $2,000 deductible still takes up 15% of an employee’s income.