Health insurance cost-growth is expected to slow for a third straight year in 2006, but only because employers continue to cut benefits and shift more of the costs to employees, according to a preliminary survey by Mercer Human Resource Consulting. The survey of 1,883 firms found that employers would expect average rate increases of 10% next year if they were to leave their current health plans unchanged, but that they expect their actual costs to be closer to 6.4% after making plan design changes. Mercer said employers had expected premiums to rise 10% this year without benefit changes, but that rate increases should be closer to 7% with design changes. For 2004, employers had forecast a 12.9% rate hike, but actually ended up paying a 7.5% increase. According to the survey, 62% of large employers and 35% of small employers said they planned to shift more costs onto employees in 2006. Final survey results, including responses from about 3,000 employers and the actual cost increase for 2005, are scheduled for release by the end of the year. -- by Laura B. Benko
Plan design changes, cost-shifting to reduce employers' insurance costs
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