Employer healthcare costs on the rise

Aon Hewitt, a human resource consulting and outsourcing solutions company with a global presence, recently released analysis that found employers are paying more for healthcare coverage than ever before.

According to the report, the average cost of health coverage for a U.S. employee is expected to surpass the $10,000 point for the first time ever when 2012 rolls around. The 7 percent increase in the average healthcare premium is slightly lower than 7.5 percent increase recorded in 2011 and close to the 6.9 percent increase recorded last year.

“In what continues to be an uncertain economic environment, organizations cannot afford health care costs growing at 7 percent each year,” said John Zern, executive vice president and the Americas Practice Director for Health & Benefits with Aon Hewitt. “While health care reform continues to represent potential systemic change in a few years, employers will continue to shift cost to employees in order to keep company costs to a manageable level.”

The rise in healthcare costs incurred by employers can be attributed to a number of different factors including a spike in the quantity and cost of significant claims and lapses in hiring which leads to the workforce getting older and more prone to various diseases and medical conditions.

The Aon Hewitt report also found the amount employers are asking their employees to contribute to the premium cost next year is projected to be $2,306, 22 percent of the total healthcare premium of the $10,475 projected total cost.

“HMO trend continues to be a cause of concern for employers,” said Tim Nimmer, chief health care actuary at Aon Hewitt. “While HMOs have higher premium costs, they offer lower out-of-pocket costs that employees value. If HMO trend continues to outpace PPO and POS trends, employers will be forced to discontinue current HMO contribution levels or eliminate HMO offerings altogether.”

In response, a lot of companies are turning to corporate health and wellness programs. These initiatives have been proven to not only lower healthcare costs company wide but also in boosting morale and productivity. Employees are offered incentives to adopt healthy lifestyle choices thus curbing absenteeism and doctor visits, lowering the amount the employer pays for coverage and the amount the employee has to pay in premiums.