Mercer: Health Benefits Up 6%

A national survey of employer-sponsored health plans has found that total health benefit costs rose by 6.1 percent in 2007, the same pace as last year, to an average of $7,983 per employee.

The survey was performed by Mercer consulting, a part of Marsh & McLennan, which also owns the insurance brokerage Marsh.

Their study follows a survey by the Council of Insurance Agents & Brokers of insurance brokers released last week that said small accounts of 50 or less employees experienced the sharpest increases since a report done in May (see NU Online Nov. 14).

Mercer said a positive finding is that cost increases have held steady for three years after spiking to nearly 15 percent in 2002, and are likely to slow a bit further in 2008, to 5.7 percent.

On the minus side, Mercer continued, is that the figure is still more than twice the rate of inflation. Health cost growth is outpacing wages and material costs and eroding business profitability.

The survey shows that small employers are dropping their plans. Among employers with fewer than 200 employees, health coverage prevalence fell from 63 percent to 61 percent in 2007, down from 66 percent five years ago.

The survey also found that 80 percent of large employers use health management programs as a way to control costs and improve productivity, while 52 percent are actively promoting employee consumerism.

The majority of employers using these strategies say they have been successful, 63 percent for health management and 62 percent for consumerism. Large employers experienced a somewhat lower average cost increase than small employers in 2007--5.1 percent compared with 6.6 percent.

A copy of the survey is available at Mercer's Web site at www.mercer.com/ushealthplansurvey.