Employer Health Costs Threaten Profits

–via Forbes

Oxford Analytica 08.18.06

Rising health costs are straining the finances of U.S. workers and firms, and dramatic increases in premiums are changing the dynamics of the labor market.

U.S. employers provide health insurance for about two-thirds of the non-elderly population, and over 90% of the privately insured have employer-sponsored insurance (ESI). Health benefits now represent more than 7% of payroll costs for firms, which contribute most of the cost of the premiums–an average of 85% for individual coverage and 75% for family coverage, according to the Kaiser Family Foundation’s annual survey. These premiums have outpaced inflation and wages since the late 1980s. Since 2000, the annual rises in wages and inflation have both hovered around 4%, while ESI premiums have grown at double or triple this rate.

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