Employer Shifting More Healthcare Costs Onto Employees

by: Nichole Gunn November 30, 2010

Although companies are aware of retaining valuable employees and have initiated a number of corporate wellness programs to this end, the new trend is for these same companies to shift the burden of rising healthcare cost onto the employees.

Employee wellness programs have been instituted in many companies for both employee and employer benefits. The employees are helped into a healthier lifestyle, and the employer saves on the company’s bottom line as a result of healthier employees. But, this shift, shows that 14% of healthcare costs have been saddled onto employees, despite a rise in insurance premiums of only 3% overall.

The Kaiser Family Foundation conducted The 2010 Employer Health Benefits Survey. This study demonstrated that companies are indeed heeding the benefits of rewards and wellness programs to increase employee productivity and reduce healthcare costs. But, while these companies have implemented employee programs and are reaping the benefits, the study found that “the share of medical insurance paid by employees has increased dramatically. Employees now pay an average of $899 per year for health insurance, compared to $779 in 2009.”

Kaiser CEO Drew Altman explained, “With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles and other cost-sharing.” He went on to add that along with the financial increases, the employee benefits are less comprehensive. “From a consumer perspective, the cost of health insurance just keeps going up faster than wages.”

Startling statistics show that employee healthcare cost contributions increased 47% since 2005. In comparison, premiums increased 27%, and wages increased 18 percent. Something seems amiss here. And, employee healthcare costs are expected to rise even more significantly in 2011.

According to a Harvard University study, “employers spending $1 on wellness programs received a return of $2.73 in increased productivity.”

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