Employers offering more health care control, choices as costs rise

(Oct. 16, 2007) Health care costs will be rising for employers in 2008, according to a survey by the consulting group Mercer. Employee benefit costs rose 6.1% in 2007 and are projected to increase by 6.7% in 2008. This increase is on top of numerous years of health care premium increases that reached as high as 13.9% in 2003.

In 2007, the rate of increases in health benefit costs far outpaced overall inflation (2.6%) as well as increases in workers’ earnings (3.7%).

The release of these figures highlights the fact that health care costs are a significant challenge to Connecticut employers. For a fourth straight year, health care benefits were ranked as the top cost concern of respondents to the 2007 CBIA/Blum Shapiro Survey of Connecticut Businesses.

Employers continue to respond strongly to the challenge of these rising costs with a growing array of services and options to help their employees control their own health care and reduce its costs.

Among the trends noted by the CBIA survey results and the national human resources consulting firm Watson Wyatt:

More communication/more tools — Employers are improving communication with workers and providing online tools to help them evaluate and estimate their health care expenses and needs and manage their personal health care. This is critically important because, as a new study by UConn revealed this week, lack of health care literacy is costing the U.S. economy between $106 billion and $230 billion annually.

Incentives for healthy behaviors — More companies are offering financial incentives to employees who practice healthy lifestyle habits or participate in wellness and fitness programs. Nearly half of employers currently offer economic incentives, and another 26% plan to do so in 2008.

Full coverage for preventive care — More employers are covering preventive medical care and even preventive drugs at 100% and not subjecting these to a deductible. Often included in these fully paid benefits are vaccinations, regular exams, and early-detection screenings, and interventions for, breast, colon and cervical cancers.

Health coaches/onsite health centers — A growing number of employers offer workers access to health coaches and advocates. These experts provide individualized advice to workers on personal health care needs and questions to ask of their health care providers.

More choice to meet individual needs — Employers are offering workers a variety of benefit options to help meet personal and family needs. These include homeowners’, automobile and group life insurance as well as discounts on vision and dental care, massage therapy, chiropractic care, weight-management programs, and fitness club memberships.

Health savings accounts — Employer interest in consumer-directed health plans with health savings accounts (HSAs) continue tos grow, with 40% of companies saying they will offer workers an HSA next year.

For more information about health care costs, contact CBIA’s Eric George at 860-244-1921 or georgee@cbia.com.