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Kaiser Analyzes Increase In Employer Health Costs

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Employers saw health benefit costs climb to an average of $2.59 per hour in 2005, almost $1 more than the average recorded just 6 years earlier.

Researchers at the Henry J. Kaiser Family Foundation, Menlo Park, Calif., have published those figures in a study of payroll and health benefits costs.

The median cost of health coverage as a share of payroll rose to 11% in 2005, from 8.2% in 1999, the researchers report.

Employers spent more on health coverage for higher-paid workers, such as executives and technicians, but health benefits costs accounted for a higher percentage of payroll for the lower-paid workers, the researchers note.

Both hourly dollar costs and the percentage-of-payroll costs are substantially larger than the figures policymakers tend to talk about when they are discussing health coverage reform proposals, the researchers observe.

Already, half of employees who had access to coverage in 2005 worked for employers that contributed at least 11% of payroll costs towards health insurance, the researchers write.

On an hourly basis, employee health insurance cost at least $2.31 for half of all employees in 2005.