Human Resources News & Insights

What HR managers told us: Increased employees’ health costs?

We asked 346 HR managers whether their employer increased employee contributions for health coverage in 2009. Here’s what they said.

  • Yes: 61%
  • No: 26%
  • No, but we’ve reduced benefits: 13%

So, three out of five increased costs. How much was the increase? A survey by HR consultant Milliman showed the average premium hike at 14.7% in 2009.

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  1. Ours increased as well. The increase overall was 13%.

  2. We’re self insured, so the greatest cost savings to us was doing away with our no deductible, 100% plan and replacing it with a $500 deductible, 90/10 plan. We increased employee portion by 5% as well. I believe we’re still very competitive with our benefits even with these changes.

  3. BJS- You’ve actually held on to a plan that pays 100% with no deductible for this long. WOW. Plans like these started disappearing years ago. Good for you. The plan that you have now sounds pretty good too. It’s good to hear of companies trying to do all they can to make sure their employees have the best health insurance plan possible. You probably could have done away with this plan years ago to be more profitable but it is such a postive thing to see employers so committed to their employees. Way to go!

  4. We had no changes this year. We too are self insured

  5. Thanks, MMAN. I’d like to share a story – I was having my hair cut in one of the local ‘chain’ salons during the worst of the economic downturn and the stylist commented that she would prefer the company to give her the money that they pay out in benefits and let her choose her own insurance. I assured her that money would not go very far in getting private insurance on her own. I think it’s critical that we as HR professionals educate our employees on their benefits; the cost to the employer, as well as the cost to the employee; the dollar value of PTO, sick time and FMLA; as well as the ‘unmeasurables’ such as allowing employees to flex their time when one of their kids has a school activity, casual Fridays, open door policies, etc. It’s up to us to make sure the employees know that we are doing everything we can to give them a quality workplace so that when these tough times hit, there’s more of an atmosphere of ‘let’s pull through this together’!

  6. We had to keep the cost from going up because we had nothing in the budget this year for an increase. When our insurer raised the rates 30% this year, we had no option but to change the plan drastically, going from a $500 deductible to a $3,000 deductible and from $10/20 co-pays to $30/50. We hated having to do it, but it was better than no insurance. We did offer an upgrade option if the employees wanted to pay about 8% more but none of the employees chose it. Iwas not too surprised since we all took pay cuts in 2009 but thought it was important to at least offer the option.

  7. Even with restructuring benefits and changing carriers, our prices were up 23% over last year. We passed a small percentage on to the employees but the company shouldered most of the burden. Given that our industry has been hit particularly hard by the economic downturn – our sales are 1/3 what they were in 2008 – we really couldn’t afford the increase.

    The owners put a very high priority on providing health benefits, so we shaved the budget just about everywhere else in order to continue providing medical insurance for our employees. Even so, I’m amazed at the number of employees that gripe about the increased cost.
    And when we were sorting out waivers, I was stunned to see that some of the loudest complainers were waiving coverage……..because they were covered by Medicaid.

  8. I’m just curious, how does a person with a paying job that offers benefits qualify for government (taxpayer) funded Medicaid? Maybe I’m not educated in this area, but I had always thought Medicaid was reserved for children of low income parents (or parent), disabled or otherwise unemployable people. I would think someone with a job, even a low paying job, would not be eligible for federal aid. I guess welfare benefits are easier to get than I thought.

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