Health benefits costs rose slightly this year, employers expect bigger jump in 2014

Staff Writer
Columbus CEO

ATLANTA -- The average per-employee cost to provide health benefits through the workplace rose 2.1 percent this year, down from a 4.1 percent increase in 2012, a new annual survey of employers by consulting firm Mercer shows.

But employers expect the cost will rise 5.2 percent in 2014, and anticipate they would go up 8 percent if they did not act to reduce expenses in anticipation of the impact of Affordable Care Act reforms. The introduction of higher deductible plans was cited as a key to holding down benefit costs.

''The good news is employers have already taken decisive action to slow cost growth so they will be in a better position to handle the challenges ahead," said Julio Portalatin, Mercer president and chief executive.

The average cost nationally of health benefits per employee in 2013 was $10,779, including employer and employee contributions for medical, dental and other coverage.

Smaller businesses -- those with 500 or fewer employees -- experienced just a 1 percent increase, while companies with 5,000-plus workers saw their costs rise 3.7 percent.

Smaller employers held down their costs partly by increasing the average PPO deductible for individual, in-network coverage by 15 percent to $1,663 this year, up from $1,452.

Still, 31 percent of smaller businesses said they expect to terminate their coverage in the next five years. That's up from 22 percent last year. Only 6 percent of larger employers said it's likely they will terminate their coverage in that time frame.

Mercer surveyed nearly 3,000 public and private organizations with 10 or more employees.

David Markiewicz writes for The Atlanta Journal-Constitution. E-mail: dmarkiewicz(at)ajc.com.

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