NU Online News Service, Oct. 1, 2003, 5:12 p.m. EDT – Big employers expect to pay an average of 11% more for health coverage for active employees in 2004 than they are paying this year, according to Towers Perrin, New York.

A year ago, big employers told Towers Perrin that they expected rates to go up about 15% in 2003.

The projected rate of increase for retirees over age 65 has fallen to 13% for 2004, from 19% for 2003, and the projected rate of increase for dental coverage has fallen to 5%, from 7%.

Researchers at Towers Perrin, a human resources consulting firm, are basing the projections on the first 200 responses to the company’s 2004 health care cost survey. Most of the participating employers are multinational companies with thousands of employees.

Although the 2004 increases will probably be smaller than the 2003 increases, the cumulative effect of five years of double-digit increases is painful, according to Jim Foreman, a Towers Perrin managing director.

“Companies are paying twice as much in health care costs today as they paid six years ago,” Foreman says.

The average total monthly cost for active employees will be $314 for employee-only coverage and $888 for family coverage, Towers Perrin says.

Active employees at big companies will pay an average of 19% of the premiums for employee-only coverage and 22% of the premiums for family coverage. Despite predictions that employers will make employees foot a larger share of the premium bills, the 2004 employee share is similar to the 2003 employee share, Towers Perrin says.