U.S. employers’ health benefit costs rose by 6.1% in 2007—the same pace as last year—to an average of US$7,983 per employee, according to a survey.
Mercer’s National Survey of Employer-Sponsored Health Plans says the good news is that cost increases have held steady for three years and are likely to slow a bit further in 2008. The bad news: the increase is still more than twice the rate of inflation.
These higher costs are prompting some employers to drop health benefits altogether. Among employers with fewer than 200 employees, only 61% offer health coverage, down from 69% in 2001.
The drop-off is continuing despite the availability of relatively low-cost consumer-directed health plans(CDHP). In 2007, the percentage of employees enrolled in a CDHP(based on either a health savings account or a health reimbursement account)rose to 5% of all covered employees from 3% last year.
CDHPs are most common among the largest employers where they are typically offered as an option alongside other medical plan choices. Seven percent of employers with fewer than 500 employees now offer a CDHP, up from 5% in 2006. They are offered by 14% of all larger employers(up from 11%)and 41% of those companies with more than 20,000 employees, compared to 37% last year.
Mercer’s survey included nearly 3,000 private and public employers with 10 or more employees.
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