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.