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Health Benefit Costs Rise At Twice Inflation Rate

By Staff Writer

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Total health benefit costs have risen 6.1% percent this year, to an average of $7,983 per employee, according to Mercer Inc.

Researchers at Mercer, a unit of Marsh & McLennan Companies Inc., New York, have based the results from a survey of about 3,000 public and private employers with 10 or more employees.

The 2007 percentage increase is about the same as the 2006 increase, and cost increases have held steady for 3 years after spiking to nearly 15% percent in 2002, Mercer researchers report.

Increases are likely to slow a bit further in 2008, to 5.7%, but, even at that lower rate, health benefits would still be rising at more than twice the rate of inflation, the researchers say.

The percentage of employers with 10 to 200 employees offering health coverage has fallen to 61% this year, from 66% in 2002, and employers with 500 or more employees are sharing the burden by increasing deductibles and other out-of-pocket costs, researchers say.

The percentage of employees enrolled in plans incorporating health savings accounts or other personal health accounts increased to 5% of all covered employees, from 3%, the researchers found.

The average cost per employee was $7,352 at preferred provider organization plans, $7,120 at health maintenance organization plans and $5,970 at health account plans.