Firms’ healthcare expenses rise 6.1%

The cost of providing healthcare for workers rose again in 2007 to nearly $8,000 annually per employee, prompting more businesses to drop the benefit, according to an annual business survey released Monday.

Costs rose by 6.1%, about the same pace as last year but lower than the double-digit rates of prior years.

But that’s still more than twice the rate of inflation, and costs to businesses would be even higher if they had not shifted more of it to the workers and their families, the National Survey of Employer-Sponsored Health Plans found.

The survey by employee benefits firm Mercer included nearly 3,000 private and public employers with 10 or more workers. In keeping with trends of recent years, businesses with fewer than 200 workers were more likely to cut back on coverage than larger ones.

The study found that enrollment in so-called consumer-directed health plans rose from 3% to 5% of all covered employees. These are high-deductible health plans linked to tax-favored health savings accounts. Premiums are lower than those of more traditional plans, but people have to pay more before the coverage kicks in.

The survey found that only 62% of large employers cover part-time workers, who make up an increasingly large share of the workforce. Some of these businesses are now offering “mini-med” plans that provide limited health coverage for part-timers.

“Some employers think they’re better than nothing,” Mercer partner Blaine Bos wrote in the report. “Others think they’re dangerously inadequate because they don’t cover catastrophic expenses.”