Big Jump Seen In Health Costs For Employees
The Wall Street Journal, October 14th, 2009
As companies begin unveiling their workplace benefits for next year,
many employees are learning they will have to dig even deeper into
their pockets for health coverage.
Such price increases have become a fact of life during
open-enrollment season, when workers sign up for their health plans.
But the jump is expected to be steeper in 2010 than this year, as
employers struggle with the impact of the recession and continually
rising insurance costs. Employees will pay $4,023 on average in
premiums and out-of-pocket charges next year, up 10% from 2009,
according to a projection from Hewitt Associates, a benefits-consulting
firm. In dollar terms, it's the biggest boost since the firm started
keeping track of the data a decade ago.
For workers, that will mean larger payroll deductions, as well as
spending more on co-payments and other fees tied to care. Companies
also are expected to prod more employees into cheaper coverage by
getting them to sign up for high-deductible health plans. And many
employers are trying to rein in the expense of covering workers'
families, sometimes by making insurance for kids and spouses pricier.
As a sweetener, some companies are offering new benefits, such as
life insurance and long-term-care insurance, that employees can opt to
buy for themselves. But workers need to look closely at such offers,
because some people may be able to purchase these benefits more cheaply
on their own.
Workers like Katha Rogers are already feeling the pinch. Ms. Rogers,
46, is a customer-service representative for Burton Metal Finishing
Inc., a small family-owned company in Columbus, Ohio. She and other
employees started paying sharply increased premium contributions this
July. The firm had to ask them to chip in more because its
health-insurance costs have been going up 10% to 20% a year, while the
economic downturn hit its revenues, says co-owner Victoria Burton.
Ms. Rogers and her husband, who also works at Burton Metal
Finishing, now pay $120 a month combined, up from nothing two years
ago. They also face bigger co-payments and deductibles. Partly because
of that, the family is trying to save money, including not taking any
vacation trips. They've also canceled some doctor visits to avoid the
new $50 co-pay. "You have to decide where you're going to cut next,"
says Ms. Rogers. Still, she says, she's grateful to have coverage in
this difficult economy.
Read more of this article.About Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
Professional Financial Advisors: Find out what a financial advisor can do for you at NewRetirement.com.