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PricewaterhouseCoopers Predicts 9% Spike in Heath Care Costs in 2011

Posted on 15 Jun 2010

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A report released Monday suggests that U.S. employers should expect their health care costs to rise by 9 percent next year -- an increase some employers might actually welcome.

While the anticipated 9 percent hike — according to a PricewaterhouseCoopers LLP report — is still a burden on employers’ bottom lines, it could mark a drop in the growth of the cost of coverage many employers already are offering to workers.

In South Florida, medical plan costs increased by 7 percent in both 2008 and 2009, according to Seitlin Insurance & Advisory Services. As the South Florida Business Journal reported in March, to help offset rising costs, employers continue to expand plan offerings for employees to include coverage with higher deductibles.

The premiums for South Florida families cost about 12 percent of an individual’s salary, with both the employer and employee covering the cost. So, for an employee with a salary of $35,000, the annual cost is $4,200, with the employer taking on the bulk of the bill.

The PricewaterhouseCoopers report predicted the continuation of several relevant trends in health care, namely the shifting of costs from employer to employee. As the premiums continue to increase and the effects of the recession drain businesses, more employers are requiring their employees to pay more for their benefits.

The PricewaterhouseCoopers report said that 42 percent of the employers surveyed plan to increase employee contributions for health insurance.

The PricewaterhouseCoopers report also found that:

* Sixty-seven percent of employers plan to expand or improve wellness programs

* More employers are dropping health benefits for retirees

* For the first time, the majority of U.S. workers are expected to have a deductible of $400 or more next year