Employer health insurance costs continue to skyrocket

By John Walch
July 16, 2007

The California Health Care Foundation just released a study of U.S. employer health insurance costs.  The first finding is no surprise to employers: health insurance premium costs per employee for employers offering health benefits increased more than $1,700, or 85%, from 1996 to 2005.  Salaries and wages increased just 39% over the same period.  In 2005, health insurance premiums constituted almost 11% of total payroll costs, an increase from 8% as recently as 2000.

The study is full of charts that all point to the same conclusion: health insurance costs are increasing rapidly, will likely continue to do so, and employers who get smart about ways to control health care costs have a competitive advantage over those who do not.  Health Savings Accounts, health reimbursement arrangements, wellness plans, and other techniques offer tools to manage these costs proactively.   Adopting these practices can reduce absenteeism, cut costs, and actually enhance the quality of benefits provided to your employees.


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