Employer Health Care Costs Expected to Rise
8.2% in 2011, Towers Watson Survey Finds
More employers plan to adopt account-based health plans, higher point-of-care costs while increasing
emphasis on wellness programs
September 15, 2010 09:59 AM Eastern Daylight Time
NEW YORK--(EON: Enhanced Online News)--Against a backdrop of continued economic uncertainty, employer
health care costs for active employees are projected to rise 8.2% (after plan changes), to an average annual cost of
$10,730 in 2011, according to a recent survey of 466 large and midsize employers conducted by Towers Watson
(NYSE, NASDAQ: TW), a global professional services company.
“Employees today are adjusting to historically lower-than-average merit pay increases, while at the same time facing
higher health care contributions, copays and deductibles. This combination could adversely affect many employees
and intensify the growing affordability crisis,” said Ron Fontanetta, senior health care consultant with Towers
Watson. “With employers also facing the challenge of steadily rising costs plus the advent of health care reform, the
need to rethink employer approaches to health care is greater than ever.”
Not since the late 1980s — a time of unprecedented health care cost inflation in the U.S. — have the nation’s
leading employers given as much attention to their organization’s health benefit plans as they are today. As
companies assess the impact of health care reform, senior managers are once again closely involving themselves in
health benefit strategy. Most employers are currently focused on compliance with the Patient Protection and
Affordable Care Act (PPACA), while some are already making significant changes to their health benefit plans.
According to survey respondents, 59% of employers plan to implement significant or moderate health care plan
design changes in 2011, and two-thirds (67%) plan to do so in 2012. While more than half of employers (57%)
report that compliance with the PPACA is their top priority t