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Most Public Entities Shifting Benefit Costs, Survey Finds

By Staff Report

Jun. 2, 2009

Public employers are being forced by the economic downturn to shift more benefit costs onto employees, according to a survey by the International Foundation of Employee Benefit Plans.


With less money in public coffers to pick up the tab for employees’ and their dependents’ health care expenses, 72 percent of U.S. public entities are considering increasing deductibles, co-insurance and/or co-pays; 74 percent are considering increasing employee premium contributions; 31 percent are adding consumer-driven health care plans; 20 percent are introducing spousal surcharges; and 26 percent are converting fully insured plans into self-funded plans.


Although many private employers typically have adopted these cost-sharing measures in response to higher health care costs, it’s rarer for public employers to do so, said Sally Natchek, senior director of research at the Brookfield, Wisconsin-based IFEBP.


“The fact that the majority of public employers are now increasing deductibles, co-pays and premiums illustrates the dual effect rising health care costs and the financial crisis are having on their plans,” Natchek said in a statement.


The rise in CDHPs is particularly interesting, since many public employers were skeptical of the plans’ ability to save money, Natchek said.


“The survey showed that while still in the minority, a significant number of public employers are implementing these types of plans,” she said of the survey of nearly 1,300 people.


The survey, “Health Care Plans: The Impact of the Financial Crisis,” is free to IFEBP members. Nonmembers can purchase the survey for $50. To order, visit www.ifebp.org/books.asp?6696E or contact the foundation bookstore at bookstore@ifebp.org.


Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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