Employers Pass Health Benefits Costs to Employees

By Marsha Austin, The Denver Post

Nov. 21–The cost of providing health benefits to employees rose 6.9 percent this year in Colorado, the lowest increase since 1997, according to a survey released today by Mercer Health & Benefits.

Mirroring national trends, employers here have managed to keep health costs from further eroding their bottom line by continuing to pass price increases on to workers, Mercer reported.

Companies have tried to shelter employees from high out-of-pocket costs by offering health insurance plans without higher monthly premiums, but those plans charge more at the doctor’s office, hospital or drug store, said Chris Watts, head of Mercer Health & Benefits in Denver.

The result: Healthy people save and the ill and injured pay.

“Intellectually it makes sense,” Watts said. “Emotionally, however, the folks who are quite sick end up paying more, so you can see the flip side of the coin.” Colorado employers bucked national trends in 2005 by offering more health savings accounts and “consumer-directed health plans,” that require the patient to pay a deductible of $500, $1,000 or more, Mercer found.

Four times as many Colorado companies offer the plans as the national average, according to the survey.

Small-business owners buy the plans because the premiums are lower, said Ken Carbaugh, president of Small Business Specialists, a Westminster- based insurance brokerage that caters to small companies.

Jim Noon, owner of Centennial Container Inc., a 10-employee business, offered health savings accounts to his workers for the first time this year.

The company used to pay 100 percent of employees’ premiums for full family coverage. But as prices rose, Centennial Container dropped the family coverage, and eventually the spousal coverage.

“Then we went from $10 to $15 to $20 deductibles to $500 deductibles to $1,500 deductibles,” Noon said. “Every year we end up spending more money per person but we have less insurance.”

If consumers can’t save enough to cover the deductible, medical bills can pile up, Carbaugh said.

Nearly one in four Americans has had trouble paying medical bills in the past year, a recent Kaiser Family Foundation/Harvard School of Public Health survey found.

Sixty-one percent of those surveyed have health insurance, according to the report.

“Most of the (clients) we’ve talked to, they’re alarmed at how the costs are going up,” Carbaugh said.

Experts fear that if prices continue to rise, more small businesses will drop coverage.

“It’s an alarming trend,” Watt said.

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