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Health Costs Rise 13% At Big Employers

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NU Online News Service, March 17, 2004, 4:22 p.m. EST – Big employers continue to see double-digit increases in health benefits costs.[@@]

Large employers are paying an average of about $7,657 per employee, up 13% from what they paid in 2003, according to a survey by the benefits arm of Fidelity Investments, Boston.

Fidelity researchers are basing the results on reports from employers that use Fidelity’s benefits administration services. Fidelity’s typical benefits administration client has about 9,500 active employees.

The surveyed employers raised employee contributions and reduced plan design value for more than half of their health plan enrollees.

The average increase in annual employee contributions was 21.4% at point-of-service plans, 18.4% at health maintenance organizations and 3.1% at preferred provider organizations.

When Fidelity asked about plan design, it found that the most popular changes were increases in specialist visit co-payments and increases in deductibles. The least popular change was an increase in the emergency room co-payment level.

Fidelity says employees seem to be noticing the reductions in plan value.

At plans where value held steady, net enrollment was flat, but net enrollment fell 7% at plans where plan value fell more than 5%, Fidelity says.