Employers Shift More Health Care Costs to Workers

Time Sheet

It's not that your paycheck feels smaller. It is smaller, thanks to the bigger portion that health care costs are siphoning from your take-home pay.

Employers year after year have shifted more of the burden for health insurance costs to workers. And it's no different for this year. Employees' premiums rose by nearly 7 percent to $2,975 for 2014, not counting out-of-pocket costs, according to a survey released this week by Towers Watson and the National Business Group on Health, an association of large employers whose members provide health coverage for more than 55 million U.S. workers, retirees and their families.

Since 2011, the total share of health care costs that employees pay has risen to 37 percent from 34.4 percent. Or put another way, it costs employees over $100 more each month for health care compared with just three years ago, the survey found.

>> Sign up for the AARP Money newsletter

Companies are still footing the majority of the bill. Employer costs are expected to reach $9,560 per employee on average in 2014 from $9,157 in 2013. That increase comes even as plans experienced the smallest cost increases in years.

So what's the prognosis for the coming years? Higher premiums will continue to chip away at workers' paychecks. Of the 595 large U.S. employers surveyed, 95 percent say they'll continue to subsidize health plan costs. But almost as many (94 percent) say they expect to make moderate to significant changes by shifting some of those costs onto workers by 2018.

Also troubling: Only 1 in 4 respondents, an all-time low, are confident that they'll offer employee health care coverage 10 years from now.



The move to saddle employees with a larger share of benefit costs has been taking shape in different ways. For instance, about half the employers say they increased employee contributions for spouses at higher rates than for individuals, the survey found. One in 4 companies say they impose spousal surcharges of around $100 per month when other coverage is available.

Retiree medical coverage is another example. According to the survey, nearly two-thirds of employers that offer retiree coverage say they're likely to eliminate those programs in the next few years and steer their pre-Medicare-age retirees to public exchanges.

Photo: CourneyK/iStock

ACA = Affordable Care Act = Obamacare

 

 

 

 

 

>> Get discounts on financial services with your AARP Member Advantages.

 

Also of Interest

 

See the  AARP home page for deals, savings tips, trivia and more

 

Search AARP Blogs

Related Posts
December 13, 2016 03:31 PM
This is a wonderful time of the year to relax, recharge and refocus before the new year begins. It’s also an ideal time for family and friends to gather to catch up, and for you to reflect and begin to focus on your 2017 goals, particularly as they relate to your career. Whether you’re employed and searching for a new job or unemployed and seeking a job, now is the perfect time to develop your execution plan. Here are a few pointers to help you get focused and stay ahead in your job search.
September 08, 2016 03:31 PM
Are you seeking a career change or a new job? If so, plan to attend  AARP’s Virtual Career Fair, Sept. 20 from 11 a.m. to 4 p.m. ET. The fair will feature employers from across the country.
March 11, 2016 10:58 AM
Are you looking for a new job or considering a career change? Many experienced workers share the sentiment that navigating today’s job market is not as easy as it was perhaps 20 years ago. In the world of social media and job hunting online, it can become even more difficult to navigate the myriad social and professional platforms. It may require you to regroup, get reenergized and rework your job search plan.