AON Hewitt
*Average Cost of U.S. Health Coverage per Employee is Expected to Cross the
$10,000 Threshold for the First Time in 2012
*http://aon.mediaroom.com/index.php?s=43&item=2397
LINCOLNSHIRE, Ill., Oct. 3, 2011 /PRNewswire/ -- While health care costs are
projected to increase at a lower rate in 2012 compared to 2011, the average
cost per employee will surpass the $10,000 mark for the first time next
year, according to Aon Hewitt, the global human resource consulting and
outsourcing business of Aon Corporation (NYSE: AON).
According to Aon Hewitt's analysis, the 2012 average health care premium
rate increase will be 7.0 percent, which is slightly lower than the 7.5
percent mark in 2011, and on par with the 6.9 percent increase in 2010.
However, the average total health care premium per employee for large
companies is projected to be $10,475 in 2012, up from $9,792 in 2011, and
$9,111 in 2010. The amount employees will be asked to contribute toward
this premium cost in 2012 is $2,306 (or 22 percent of the total health care
premium), compared to $2,084 in 2011 (or 21.3 percent of the total health
care premium), and $1,952 in 2010 (or 21.4 percent of the total health care
premium). Meanwhile, average employee out-of-pocket costs, such as
copayments, coinsurance and deductibles, are expected to be $2,275 in 2012,
compared to $2,007 in 2011, and $1,691 in 2010.
According to Aon Hewitt, a number of factors are driving the projected
increase in health care cost for 2012. Employers continue to experience an
increase in the quantity and cost of catastrophic claims, as slower levels
of hiring have resulted in slightly older workforces who are more prone to
costly medical conditions. In addition, generally poorer health – leading to
increases in costly conditions such as diabetes and heart disease – make it
difficult for employers to deploy tactics that drive short-term cost
savings. As a result, employers continue to ask employees to absorb
increases through a combination of out-of-pocket cost and increased payroll
contributions.
"In what continues to be an uncertain economic environment, organizations
cannot afford health care costs growing at 7 percent each year," said John
Zern, executive vice president and the Americas Practice Director for Health
& Benefits with Aon Hewitt. "While health care reform continues to
represent potential systemic change in a few years, employers will continue
to shift cost to employees in order to keep company costs to a manageable
level."
Cost by Plan Type
On average, Aon Hewitt forecasts that companies will realize 2012 cost
increases of 7.8 percent for health maintenance organization plans (HMOs),
6.6 percent for preferred provider organizations (PPOs) and 6.6 percent for
point-of-service (POS). That means from 2011 to 2012, the average cost per
person for major companies is estimated to increase from $10,344 to $11,151
for HMOs, $9,417 to $10,038 for PPOs and $10,375 to $11,059 for POS plans.
AND MUCH MORE...including TABLES....
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Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 262-6041
Fax: (607) 255-9641
E-mail: smb6(a)cornell.edu
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Eugene McElroy
Library Associate
School of Management and Labor Relations
SMLR Library
Rutgers University
50 Labor Center Way
New Brunswick, NJ 08901
(732) 932-9513
