NU Online News Service, Aug. 18, 2003, 5:23 p.m. EDT – Employer costs for health benefits now account for 8.8% of payroll expenses at U.S. large and midsize employers, up from 7.3% in 2000, according to the Hay Group Inc., Philadelphia.
Hay surveyed 1,000 U.S. companies and found that their health insurance premiums rose an average 15% this year, even after adjusting for benefit reductions.
In addition to the cost of new medical treatments, tougher provider contract negotiators and relaxation of care management at health maintenance organizations, one factor has been a shift toward preferred provider organization plans.
Fifty-seven percent of the employers that Hay surveyed now offer PPO plans as their primary plans, up from 40% four years ago, Hay says.
Many of the employers surveyed have responded to the cost increases by asking employees to pay more for doctor visits and prescription drug purchases.