Employers will be looking for ways to keep a lid on rising health benefit expenses in 2004, as preliminary estimates show they'll pay 13 percent more in total premiums if they keep the same coverage.
A Mercer Human Resources Consulting report released today offered that prediction. It says the nation's employers held their health insurance costs to a relatively modest 10.1 percent increase this year, in part by paring coverage and forcing workers to pay higher co-pays for services. Benefit costs had been expected to increase 14 percent in 2003.
"In 2003, employers could take no more," said Matthew Snook, a consultant with Mercer in Tampa. "They started pushing a lot (of costs) back down to employees in a significant way in 2003, and I expect it to continue in 2004."
Mercer, a New York City benefit consulting company, surveyed nearly 3,000 employers earlier this year, after most had received initial estimates of their premium projections for 2004.
Among the tactics more employers are using to hold down costs: increasing the employee's share of spouse or dependent coverage, especially if a working spouse has the option of coverage through his or her employer.
The Mercer survey also found more employers seeking government intervention. That leads Snook to wonder if there will even be such a thing as employer-sponsored health care in the future.
"I don't think employers want to get out of the business of providing benefits, but they see the writing on the wall," he said. "Something's got to give. Small employers have less fat to fall back on, but large public companies are having their profit margins meaningfully impacted by health benefit costs. Their CFOs are taking notice of this like never before."
