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Employees Pay More and Get Less from Medical Coverage

Burden of Healthcare Shifting From Companies to Workers, New Survey Says

Workers are paying 14 percent more for their employer-sponsored plans than they did last year as a bigger chunk of healthcare costs shifted from employers to employees, according to a new survey.

Workers paid nearly $3,997 this year toward the cost of family healthcare coverage -- up $482 from the average employee share in 2009 and a jump of 47 percent from the average employee share for family coverage in 2005.

Meanwhile, employers are paying an average of $9,773, down $87 from what they paid last year. Moreover, 30 percent of companies surveyed said they reduced the scope of benefits at the same time that they increased the amount their employees must pay for health insurance in the past year.

Altman said the struggling economy has caused businesses to shift more of the costs onto workers by requiring them to pay a greater share of their healthcare costs.

In addition to the higher premiums, many employers are also raising the annual deductibles -- 27 percent of employees faced deductibles of at least $1,000 in 2010 compared with last year when 22 percent of workers had deductibles of $1,000 or more, the survey found.

What employees pay for their healthcare costs has increased much more than their wages, the report found. Since 2005, workers' contributions to premiums have gone up 47 percent while wages increased 18 percent (and inflation rose 12 percent).

"From a consumer perspective, the cost of health insurance just keeps going up faster than wages," Altman said.

The survey also looked at the most common type of insurance offered to employees and found that Preferred Provider Organizations (PPOs) continue to dominate the employer market, enrolling 58 percent of covered workers. The average premiums for a family PPO plan topped $14,000 annually in 2010, with $3,823 of tab paid by the employee, representing a 20 percent increase from 2006.

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