Trends & analysis: Healthcare costs on the rise

Companies look to employees to help shoulder the burden
Jenni Chase
March 26, 2012
RETAIL : TRENDS & ANALYSIS

Healthcare costs continue to increase, both for employers and their employees. Since 2001, average premiums for family coverage have risen 113 percent, according to the Kaiser Family Foundation and Health Research & Educational Trust. In 2011, premiums for single coverage were 8 percent higher than in 2010 and premiums for family coverage were up 9 percent, the groups report in their "2011 Employer Health Benefits Survey."

"[2011's] 9 percent increase in premiums [was] especially painful for workers and employers struggling through a weak recovery," said Drew Altman, president and CEO of Kaiser, when introducing the survey. Last year, premiums increased significantly faster than workers' wages (2.1 percent) and general inflation (3.2 percent).

A competitive bidding environment and still shaky construction market compound the problem for glass companies, as they look for ways to keep costs down and still offer benefit coverage. For some, this has meant asking employees to help offset more of the expense.

"We passed some increase onto employees, and we absorbed a good bit of it ourselves," says Mark Hargraves, vice president of Zephyr Aluminum LLC, which employs 80 people. "It's affecting our bottom line; we have to increase our mark up, but in an environment where we can't do that.

"We haven't changed the coverage ... to our employees at all. However, we did require anybody who has a working spouse that is eligible for coverage [at his or her job] to seek that coverage rather than be on ours. We had everyone sign a document saying that if their spouse had available coverage, they were taking it."

Employees contributed, on average, 18 percent of the premium for single coverage and 28 percent of the premium for family coverage in 2011, according to Kaiser, which surveys more than 2,000 employers across the country annually, in conjunction with the Health Research and Educational Trust. These figures are up slightly over 2009, when employees contributed an average of 17 percent of the premium for single coverage and 27 percent of family coverage costs. Over the past 10 years, employee contributions to family healthcare plans, specifically, have increased 131 percent, according to the survey.

Of the 84 companies that participated in Glass Magazine's recent "Employer-Sponsored Health Benefits Survey," the majority (38 percent) said they paid 100 percent of employee's single coverage and did not pay for family coverage (43 percent). Click here for a detailed breakdown of the survey results.

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Jenni Chase is editorial director of Glass Magazine, e-glass weekly and GlassMagazine.com. Write her at jchase@glass.org.