The pinch on employer benefits

When I began my professional career over a decade ago, I didn’t give a second thought to employer benefits, particularly health insurance. I was a healthy “young invincible” and rarely went to the doctor. The dent in my paycheck was insignificant and I remember having co-pays in the $5 to $10 range. Now I am 35 years old, married, have two young children and manage the employer benefits for the Colorado Health Institute. The cost of care for both employer and employee has never been more important and transparent to me.

As a father and a husband, I want the best possible care for my family, yet the bite that this takes out of my paycheck has grown steadily over the years. I feel the pinch in my wallet when we sit down and work on the family budget. As a benefits manager, I have a dual responsibility to make sure we are providing quality options for our employees while controlling company costs. I feel the pinch in CHI’s bank account as I prepare the 2012 budget.

A lot of other parties feel the pinch too. Lockton Companies, LLC recently released its 2012 Colorado Employer Benefits Survey Report. It is a non-scientific survey designed to show trends, attitudes and strategies related to employer benefits. Several of the findings are striking:

• 92% of employers that responded to the survey indicated that increases in the cost of insurance plans is a major or critical concern to them. This has been the number one overall concern for 10 years in a row.
• The average health plan rate increase this year was 9.4%, less than last year’s 14.4%, but slightly higher than the reported national average of 9%.
• 77% of respondents plan to pass some portion of this cost increase along to employees.
• More responding employers (40%) this year are offering high-deductible health plans eligible for Health Savings Accounts than last year (36%). This is a cost-shifting measure.
• The rate of plan cost increases continues to outstrip the rate of merit increases. This may result in more employees waiving medical coverage.
• Finally, the number two concern for three years running is compliance with and understanding of national health care reform.

Affordability is obviously a major issue for both employers and employees. It is tightly linked to the employer cost statistics cited above as well as with many Coloradans’ lack of health insurance. CHI’s research analysts are examining the issue of affordability from responses to the Colorado Health Access Survey. Meanwhile, that number two concern, national health care reform, awaits its date for a U.S. Supreme Court hearing and continues to be debated by presidential candidates. Obviously, affordability and the debate over health reform are inextricably linked.