Four of 10 Companies Expect Healthcare Costs to Increase Under Obama

Companies See Reduced Healthcare Enrollment as Cost Crisis Continues

SEATTLE, WA (Jan. 12, 2009) – Costs have been shifted and cutbacks have come, but the health-care expense crisis continues for employers – and a new administration in the White House isn’t expected to provide companies with much help, according to a recent Institute for Corporate Productivity (i4cp) study.

The study found that 65% of polled companies have shifted a portion of the cost of health benefits to employees during the past 5 years. 41% of those who have transferred costs to workers have increased the amount the employee pays by up to 10%, while 33% have upped their workers’ portion of payment by 11-20%.

More alarmingly, in the face of increased costs 14% of companies overall (21% in companies with more than 10,000 workers) report a reduction in health-care plan enrollment.

And the prospect of a new President isn’t projected to be of much assistance. Thirty-eight percent of respondents said they believe the new democratic administration will lead to increased company health-care costs, and 15% think health-care expenses will rise for consumers and employees. Fewer than 2% think costs will decrease under Barack Obama.

"While the reasons for a shift in costs are certainly understandable, companies should be concerned about any drop in employee enrollment in health-care plans,” said i4cp Research Analyst Anne Lindberg. “Very literally, it could have a detrimental effect on the company’s health if their workers forego checkups or medical procedures because of the extra cost.”

Cost issues aside, most employers offer a variety of health-care options, and many are taking a proactive approach in their health-care offerings by stepping up wellness and assessment initiatives.

Among health benefits offered by organizations, PPO plans are far and away the favored option, with 68% of all companies ranking it first. Both FSA and HMO health-care programs are offered by 41% of polled companies. More than half (52%) of organizations offer an eye care option, and 68% provide dental coverage.

Almost two-thirds of all respondents offer wellness programs in their organizations, a number that jumps to 96% in large companies. Among wellness perks, 73% provide flu shot options, 65% provide handouts regarding wellness issues and 58% post health-care information in common areas at their companies. In addition, 43% of companies have on-site gyms for use by employees, and 40% provide health-related classes on-site (Yoga, exercise, nutrition, etc.).

In addition, half of all polled companies and 67% of large firms are planning to add wellness initiatives within the next two years. Health risk assessments are offered by 44% of responding companies, and that option is made available by 83% of large companies.

The Healthcare Pulse survey was conducted by i4cp, in conjunction with, in December 2008. There were a total of 212 respondents. The full results of the survey are available exclusively for all i4cp corporate members.

About i4cp, inc.

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