Employers plan to reduce contributions to employees' premiums in 2010, survey says

Two out of every three U.S. employers are examining ways to reduce the amount they contribute to employees' health care expenses in 2010, according to a study by Hewitt Associates, the Chicago Tribune reports. In addition, Hewitt said 4% of U.S. employers are planning "to discontinue providing health care benefits altogether."

Hewitt surveyed more than 340 large firms comprised of more than five million employees. The survey found that the combined average premium and out-of-pocket costs for health care coverage for employees in 2009 will rise by about 9% to $3,826 a year and annual insurance costs for companies will increase by 6.4% to $8,863 per employee. In 2009, workers likely will see their annual contributions to premiums increase by nearly 8% to $1,946, which is about 22% of the overall premium. The survey estimated that the percentage of premiums employees are expected to pay will increase in 2010.

According to the Tribune, employees' out-of-pocket cost for copayments and deductibles can increase along with the premium. Hewitt said that workers in 2009 will spend $156 out of pocket monthly, a 10.1% increase over 2008.

Incentives To Reduce Costs

The need to cut costs has led employers to offer more incentives to entice workers to use more wellness services, such as preventive health screenings and health club memberships, according to the Tribune. Larry Boress, president of the Midwest Business Group on Health, said, "[Employers] are continually looking for ways to reduce benefit costs without reducing benefits." Boress also said that employers are seeking to cut costs for workers by reducing administrative fees, promoting the use of generic drugs, requiring mail order prescription refills for maintenance drugs and conducting eligibility audits to ensure that coverage is not being offered to ineligible employees or their families (Japsen, Chicago Tribune, 3/5).