E-pinions

Survey Shows What Employers Are Doing to Reduce Health Care Costs

By Stephen Bruce, PhD, PHR

Managing Editor, HR Daily Advisor

Just My E-pinion

Big surprise—health care costs are going up. In our recent survey, 56% reported annual costs per employee in the $5,000-10,000 range (compared to 47% in last year’s survey), and 18% reported costs of over $10,000 per year (compared to 12 % in last year’s survey).

Eighty-four percent of responding companies reported taking at least one action to reduce healthcare costs in the prior year, and two-thirds plan further cost control in the coming year. The most popular cost control steps include:

  • Raising employees’ portion of healthcare premiums
  • Raising employees’ copayments and deductibles
  • Offering health savings accounts (HSAs) and/or health reimbursement accounts (HRAs)
  • Implementing wellness programs

The survey, conducted by HR Daily Advisor in May, 2011, received 338 responses. Respondents were primarily HR managers, from a mix of industries, with over half from manufacturing and construction. Respondents were geographically spread across the US, with about three-quarters of respondents employing 499 or fewer.

Here are the detailed results:

For the detailed survey report with demographic breakdowns for each question, go here.  

2010 Cost per Employee of Legally Required Benefits (Social Security, Medicare, Unemployment, Workers’ Compensation):

 

Number

Percent

Less than $3,000

35

12%

$3,000 to $4,000

44

15%

$4,001 to $5,000

39

14%

$5,001 to $6,000

33

12%

$6,001 to $7,000

18

6%

$7,001 to $8,000

23

8%

$8,001 to $10,000

27

9%

More than $10,000

67

23%

 

Organization Offers Health Insurance to employees:

 

Number

Percent

Yes

321

99%

No

3

1%

2010 Health Insurance Cost per Employee:

 

Number

Percent

Less than $3,000

23

8%

$3,000 to $4,000

38

14%

$4,001 to $5,000

38

14%

$5,001 to $6,000

30

11%

$6,001 to $7,000

33

12%

$7,001 to $8,000

30

11%

$8,001 to $10,000

34

12%

Over $10,000

50

18%

Corporate Actions Taken in the Last 12 Months to Reduce Healthcare Costs:

 

Exempt Employees

 

Nonexempt Employees

 

 

Number

Percent

Number

Percent

Raised employees’ copayment

100

42%

113

47%

Raised employees’ deductible

111

46%

121

51%

Raised employees’ portion of premium

128

54%

134

56%

Introduced managed care program

12

5%

16

7%

Conducted independent audits

36

15%

38

16%

Reduced contributions to dependent audits

24

10%

26

11%

Offered HAS/HRA high deductible plans

65

27%

75

 31%

Structured employee premiums on ability to pay or % salary

7

3%

9

4%

Implemented wellness programs

70

29%

73

31%

Discontinued retiree coverage

6

3%

6

3%

Discontinued coverage to part-timers

13

5%

13

5%

Offered opt-out incentives

12

5%

13

5%

Corporate Actions Planned for the NEXT 12 Months to Reduce Health Care Costs:

 

Exempt Employees

 

Nonexempt Employees

 

 

Number

Percent

Number

Percent

Raise employees’ copayment

60

25%

113

47%

Raise employees’ deductible

55

23%

121

51%

Raise employees’ portion of premium

117

49%

134

56%

Introduce managed care program

8

3%

16

7%

Conduct dependent audits

30

13%

38

16%

Reduce contributions to dependent premiums

18

8%

26

11%

Offer HSA/HRA High deductible plans

43

18%

75

31%

Structure emp. premiums on ability to pay or % salary

5

2%

9

4%

Implement wellness programs

55

23%

73

31%

Discontinued retiree coverage

2

1%

6

3%

Discontinue coverage to part-timers

9

4%

13

5%

Offer opt-out incentives

13

5%

13

5%

2010 Costs per Employee of Supplemental Pay, Such as Overtime, Premium, and Shift Differentials and Nonproduction Bonuses:

 

Number

Percent

We do not provide supplemental pay

 62

25%

Less than $1,000

53

21%

$1,000 to $2,000

49

20%

$2,001 to $3,000

27

11%

$3,001 to $4,000

17

7%

$4,001 to $5,000

11

4%

$5,001 to $6,000

7

3%

$6,001 to $8,000

5

2%

$8,001 to $10,000

5

2%

Over $10,000

14

6%

2010 Costs per Employee of Paid Leave Time, Defined as Wage/Salary Costs of Vacations, Holidays, Sick Leave and Personal Days:

 

Number

Percent

We do not track this expense

108

40%

We do not provide paid time off

3

1%

Less than $1,000

6

2%

$1,000 to $2,000

25

9%

$2,001 to $3,000

21

8%

$3,001 to $4,000

23

9%

$4,001 to $5,000

19

7%

$5,001 to $6,000

13

5%

$6,001 to $8,000

11

4%

$8,001 to $10,000

13

5%

Over $10,000

25

9%

Thanks to all who participated in the survey.

For a copy of the full survey, which includes complete demographic breakdowns of each question, and responses by size, geographic region, and type, go here.

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