UBP blog


Employee contributions to monthly premiums up 14.7% from last year

A recent study from benefits consulting firm Millman Inc. revealed a not too surprising figure. Although the total cost to insure the average family on an employer-sponsored health insurance plan went up 7.4% from last year, the employee contribution to this year’s amount went up 14.7%. Employees, on average, paid $4,004 in premiums and $2,820 in out-of-pocket medical expenses.

This year is the third consecutive year that the Millman Medical Index (MMI), which measures average annual medical spending for a typical American family of four on an employer-sponsored PPO plan, found a double-digit percentage increase in employee contribution amounts. Counting premium payments alone, Millman found that the total cost to participate in an employer-sponsored plan can exceed 8% of the average annual household income of $50,000.

Millman expects this trend of growth in employee contributions to their medical benefits to continue after the recession subsides. This is because as the recession began to take hold, employers responded with quick and definite cost-saving strategies such as pay cuts and layoffs. Benefit plans, and consequently benefit plan contribution amounts, are only changed annually and cost-saving changes in these are slower to materialize as a result.

Have employee contributions to insurance costs gone up in your company and do you expect double-digit increases in them over the next few years?

How have you communicated this to your employees?

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create a free website or blog at WordPress.com.

%d bloggers like this: