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The Honolulu Advertiser
Posted on: Monday, July 7, 2003

Employers passing on high cost of healthcare

By Diane Stafford
Knight Ridder News Service

Rising healthcare costs and a weak economy are causing employers to nip away at employee benefits.

The 2003 Benefits Survey by the Society for Human Resource Management found that more than nine out of 10 employers averaged an 18 percent cost increase over what they paid for healthcare benefits in 2002.

Higher costs also translated into an average 13 percent healthcare cost increase for their employees' share of the bill.

The national association polled 584 personnel managers at member companies to obtain its statistics.

In response to higher costs, many employers dropped some benefits. Among programs that declined from 2002 to 2003:

  • HMO coverage, from 59 percent of employers to 54 percent.
  • Employer-financed health reimbursement accounts, from 28 percent to 20 percent.
  • Well-baby programs, from 57 percent to 42 percent.
  • Prenatal programs, from 44 percent to 27 percent.

At the same time, more employers offered other kinds of health-related benefits. Prescription drug assistance was offered by 98 percent of the companies surveyed, up from 95 percent the previous year.

Cancer insurance was more widely offered, rising from 21 percent of employers to 28 percent.