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Sherlock Measures Effects Of Health Benefits Shrinkage

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Efforts to trim health benefits packages and pass costs on to employees may be responsible for much of the recent moderation in rate increases.[@@]

When researchers at Sherlock Company, Gwynedd, Pa., surveyed 80 plan providers recently, they found an average projected plan cost increase of 8.4% for 2006, down from 9.3% this year.

But the decrease was the result of benefit buy-downs, according to Doug Sherlock, head of the firm.

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Excluding the effects of buy-downs, the projected average premium rate increase for 2006 would be 11.1%, down only slightly from 11.3% this year, Sherlock says.

“We estimate that the difference between before and after buy-down rate increases implies a 21.2% increase in employee contributions for 2006,” Sherlock says.