Insurance Increases Weigh Heavily on Manufacturers

August 24, 2010    

Original Article: Dayton Business Journal

Manufacturers across the country are paying double-digit increases for employee health insurance this year.

A study released Tuesday by Compdata Surveys shows manufacturing companies saw average premium increase of 11 percent.

“Employers have been feeling the financial pinch of increasing medical costs for several years now,” said Amy Kaminski, director of marketing for Compdata Surveys. “The economic downturn of the last couple of years has only amplified financial concerns, causing organizations to increase their efforts to find ways to mitigate some of the costs of providing medical coverage for their employees.”

Kettering-based Starwin Industries Inc. kept its renewal rate increase at about 11 percent by raising its plan deductibles.

“We had to modify the coverage we have again this year so that we could still give our employees good coverage without increasing the cost too much,” said Rick Little, president of Starwin. “But, my gut feeling with the changes that are coming is that (prices) are going to go up quite a bit.”

According to the Compdata Surveys study, increasing employee contributions was the most popular way to offset higher costs as more than 56 percent of employers asked workers to pay more for insurance. Nearly 47 percent of manufacturers increased deductible levels in their plans while more than 25 percent increased employee coinsurance levels. About 23 percent of companies surveyed offered a choice of deductible levels.

Cost containment measures also have been a popular option as more than 80 percent organizations surveyed use coordination of benefits to bring costs in line. More than half of manufacturers have a disease management program, pharmacy benefit management and utilization reviews to contain costs.

Although employees have become responsible for paying a larger portion of their medical insurance premiums over the last few years, employers still cover on average over 70 percent of the total cost, according to the study. More than 80 percent of survey respondents report paying more than $7,200 annually for an employee plus family plan.

Compdata Surveys’ officials said the study analyzed data from nearly manufacturing employers across the country.

Manufacturing represents 120,000 employees in the 12-county region surrounding Dayton and contributes $1.6 billion in annual payroll and $2.3 billion in economic development, according to a 2009 study by the Dayton Tooling and Manufacturing Association.

 Original Article: Dayton Business Journal

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