More Businesses Pass Insurance Hikes to Employees

 

Special section: Health care

 

Most area businesses are coping with rising health care costs by increasing employee contributions, according to a new survey of 432 employers in the metropolitan Milwaukee area by Human Resource Services Inc. Of the businesses responding to the survey, 75% indicated they are increasing employee contributions for health care costs. Just over half, 52%, of the businesses surveyed said they are reducing benefit levels for their employees. Only 6% of the businesses surveyed said they are absorbing the entire increase of health insurance costs and are making no changes to benefits.

Rising cost is only one reason why many employers are reducing their contributions for health insurance premiums, said Jessica Ollenburg, president and chief executive officer of Human Resource Services, based in Greenfield. During the economic boom of the 1990s, many employers increased their contributions to health care costs, boosting employee benefits in an attempt to attract quality workers in a tight labor market, Ollenburg said. Today, many employers are reducing their contributions toward health care costs, not only to combat increasing costs but also to adjust from the increased employer contributions during the previous decade, she said.

"You turn from an employee's market to an employer's market, combined with the massive increases in health care costs," Ollenburg said. Ollenburg said recent discussions Human Resource Services employees have had with area business executives indicate most of the companies that are absorbing all of the increases in health care costs currently contribute 70% or less. Human Resource Services provides resources for human relations professionals and executives including assessment, recruitment and team development.

The survey was conducted between July and September of this year. The employers surveyed include small, mid-size and large companies, with facilities within 90 miles of metropolitan Milwaukee. Human Resource Services also surveyed 912 employees and job-seekers who live within 90 miles of metro Milwaukee. Those employees were evenly split on three choices for how their employers should cope with rising health care costs. About one third of the survey respondents chose each of the three options: less physician and medical facility choices; increased employee contribution to premiums; or increased out-of-pocket expenses for each medical visit.

The employees surveyed earned between $20,000 and $60,000 annually and work in a variety of job fields, including manufacturing, administrative, trades and customer service. Almost half of the employees surveyed said job security is the most important factor to them in their jobs. Only 8% said benefits and perks are the most important aspects of their job.

About 14% said pay is the most important factor. Another 15% said training and positive feedback is the most important, and another 15% said career advancement potential is the most important aspect of their job. Almost 75% of employees surveyed said their immediate supervisor has become more difficult, unreasonable and unpleasant to work for in the last year. "What we're trying to do here (with the survey) is give employers some information about what other employers are doing and what are the goals and expectations of employees," Ollenburg said.

Oct. 17, 2003 Small Business Times, Milwaukee, by Andrew Weiland, SBT Reporter