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Workers to foot growing health care tab
Many large employers expect to shift cost increases to their employees next year, survey says.
September 13, 2005: 2:23 PM EDT

NEW YORK (CNN/Money) - To deal with rising health care costs, many employers plan to have their employees pick up more of the bill next year, according to initial survey results released Tuesday.

To manage surging healthcare costs, several employers are cutting benefits and making changes to the medical plans they offer, preliminary results from Mercer Human Resource Consulting's survey of more than 1,800 employers showed.

After making these changes, employers expect costs to increase an average 6.4 percent in 2006, down from the 7.5 percent rise employers felt last year.

"We used to think of cost-shifting as something you could do only every so often," said Blaine Bos, a healthcare consultant for Mercer. "But we're seeing a new willingness on the part of employers -- born of desperation -- to shift cost in successive years to achieve acceptable cost increases."

Without making any changes to their current medical plans, the average cost increase for employers would be almost 10 percent, or about three times the rate of inflation, the report said.

Nearly two-thirds, or 62 percent, of the large employers surveyed -- those with 500 or more employees -- said they would keep costs down by shifting increases to employees, the report said.

Thirty-nine percent of large employers said they would increase the percentage of premiums paid by the employee, while 32 percent said they would raise deductibles, copyaments, coinsurance or out-of-pocket maximums.

But only 35 percent of small employers surveyed said they plan on shifting costs to employees next year.

Costs are rising more slowly for small employers, who are expecting a 5.8 percent rise in health benefit costs next year, versus 6.8 percent for large employers.

The preliminary results are not weighted, but final results will be weighted to be nationally projectable, Mercer said. Final results, which will include participation of nearly 3,000 employers, are expected to be released by the end of the year.

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