"We usually give our employees more than one choice," the chief executive of Fire Sprinkler LLC said. "It could be we don't — maybe we give them one choice."
Stella, whose Nashville-based company installs fire protection systems, isn't alone. Many employers are considering changes, including raising co-pays on prescription drugs to increase their employees' share of costs in a bid to curb growth in medical plan costs.
Such cost-cutting actions should reduce employers' growth in costs next year to just below 6 percent instead of nearly 9 percent otherwise, suggest preliminary results of consultant Mercer's annual benefits survey.
Responses from half of the 3,000 employers ultimately expected to participate show more cuts than usual being made in budgets for next year, with those hardest hit by the recession making the biggest cuts. Roughly 40 percent of respondents said they planned to ask employees to pay a higher portion of monthly premiums or increase co-payments, deductibles or out-of-pocket maximums.
Employers' costs are rising in part from stress-related illnesses tied to economic worries. In some cases workers and their dependents are using more health-care services. They're filling prescriptions, getting preventive care or undergoing previously delayed elective procedures while they're on health plans for fear of losing coverage if laid off later, Mercer said.
Employers consider their optionsEdward Scott, a consulting actuary with benefit consultants Bryan Pendleton Swats & McAllister LLC of Brentwood, sees more clients pricing plan options to keep premiums from rising and to avoid passing on too many costs to employees.
Tactics they're using include lowering co-pays to steer employees toward plans with less-costly generic drugs and offering high-deductible health plans with health savings accounts. With those, money is set aside for employees' medical costs that they can keep if they don't use it.
(2 of 2)Health insurance premiums ease upwardReal Estate Outlook: Price and Sale Gains
