Medical Insurance Costs Increase for Not-For-Profit Organizations

September 15, 2010    

Despite legislation recently passed to bring costs in line, providing medical insurance continues to grow increasingly expensive for not-for-profit employers across the country. The newly released 2010 Compensation Data Not-For-Profit survey results show not-for-profit organizations had an average premium increase of 10.3 percent. Almost 70 percent of survey respondents report paying more than $9,600 annually for an employee plus family plan.

Employee plus spouse plans cost employers more than $7,200 per year. Not-for-profit organizations pay more than $2,400 each year for employee only coverage, with employees paying more than $300 per year for the same coverage. 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.

“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 nation’s leading pay and benefits survey data provider. “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.”

To reduce costs, not-for-profit organizations employed a variety of methods. Increasing the employee portion of the premium was most prevalent at 54.2 percent, with an increase in deductible levels following at 40.7 percent. The results showed that 29.2 percent of organizations increased employee co-insurance levels. Switching carriers was utilized by 20.2 percent of survey respondents.

Cost containment measures are also a popular option as 80.6 percent of organizations surveyed use coordination of benefits to bring costs in line. More than half of not-for-profit organizations employ disease management, pharmacy benefit management and utilization reviews to contain costs. Pre-existing condition clauses are utilized by 39.1 percent of survey respondents.

About the Survey
Compensation Data 2010 Not-For-Profit contains data on over 100 industry-specific job titles and more than 300 benchmark titles ranging from entry-level to top executives. Data is collected annually from not-for-profit employers across the country. The results provide a comprehensive summary of pay data, benefit information and pay practices with an effective date of March 1, 2010.

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