“We expect to see new costs related to excise taxes and potential cost shifting from reductions in Medicare reimbursement to providers, which will be on top of existing long-term medical trend inflation. These factors will lead many employers to consider increased employee contributions for health coverage, as well as plan design cost sharing,” says Tom Lerche, senior vice president with Aon Consulting.
Aon Consulting surveyed 1,079 employers nationwide in its 2010 Benefits Survey, and found an increase in monthly COBRA contributions for terminated employees. The average monthly cost for employee-only HMO coverage for a terminated worker is $429 this year, compared to $399 for the same coverage in 2009, Aon says. For employee plus family, the former employee is paying $1,251 a month this year, compared to $1,171 per month last year. As for PPO coverage, the average monthly cost for employee only is $449 in 2010, compared to $439 in 2009, and for employee plus family, the cost tops out at a monthly average of $1,310 this year, versus $1,275 last year, according to the survey.
Current employees can expect to shoulder more of the expense related to health coverage in 2011; Aon says 65 percent of employers plan to increase cost sharing next year for things such as deductibles, co-pays and out-of-pocket maximums, 57 percent of companies say they will ask employees to contribute more for the overall cost of health care in 2011. The amount of cost sharing implemented by employers varies, Aon says: on plan design (e.g., deductibles, co-pays and out-of-pocket maximums), 46 percent of employers are shifting costs to employees equal to the overall renewal increase, while an additional 46 percent are shifting costs to workers that are less than the overall renewal increase. For overall health plan cost, 40 percent of employers say the additional worker contributions will be equal to the 2011 renewal increase, and 49 percent indicate that workers will be asked to pay less than next year’s renewal increase.
