Employee health costs on the rise

WASHINGTON — Strained by rising health care costs and the sour economy, U.S. employers are pressing workers to shoulder the added burden alone as employees pay higher insurance premiums and more out-of-pocket expenses for their medical care.

The average employer-provided family health plan now costs workers nearly $4,000 a year, up 14 percent from last year, according to a survey by the nonprofit Kaiser Family Foundation and the Health Research and Educational Trust.

That is the largest annual increase since the survey began in 1999 and a marked change from previous years, when employers generally split the cost of rising premiums with their employees.

Indeed, the average employer contribution to a family plan did not increase at all this year, meaning the entire increase was borne by workers.

Overall, premium growth slowed slightly this year to 3 percent, with the average annual cost of a family health plan reaching $13,370. Workers picked up 30 percent of that bill. The average plan for a single individual cost $5,049.

At the same time, workers also saw average co-payments for routine office visits rise 10 percent and deductibles continue their surge upward.

In 2010, more than a quarter of American workers with employer-provided health coverage are in plans with deductibles of $1,000 or higher.

The squeeze, reported by employers between January and May, largely reflects the fallout of the ongoing economic slowdown and may be ameliorated in future years as the new health care law is implemented.

But it could also further complicate the Obama administration’s efforts to rally support for the law, which is expected to do relatively little in the short term to contain rising medical bills.

“There have been times when employers have been able to absorb costs. This is not one of those times,” said James Gelfand, health policy director at the U.S. Chamber of Commerce, a leading critic of the new law.

The law, which focused on expanding coverage for Americans who don’t get insurance through work, was designed to largely preserve the existing employer-based health system.

And independent analyses of the law estimate that most Americans will continue to get insurance through their employer, as some 157 million do now.

The Kaiser survey found that the percentage of firms offering health benefits actually increased from 60 percent to 69 percent this year, an unexpected spike that analysts speculate may reflect the failure of many businesses that didn’t offer benefits.

But the survey suggests that the coverage workers are being offered is becoming increasingly unattractive as employers try to control their own costs in the down economy.

“We were all so focused on the reform debate that I think we took our eyes off the fact that what we call health insurance in this country is changing,” said Kaiser President Drew Altman.

Since 2005, workers’ contributions to insurance premiums have shot up 47 percent, far outpacing the 18 percent increase in wages over the same period, according to the survey.

The squeeze on employees at small and medium-sized businesses has been particularly intense, as these employers face the biggest challenges providing their workers with health benefits.