Medical Insurance Costs Increase for Hospitality Employers

September 16, 2010    

Despite legislation recently passed to bring costs in line, providing medical insurance continues to grow increasingly expensive for hospitality employers across the country.  The newly released 2010 Compensation Data Hospitality survey results show hospitality organizations had an average premium increase of 9.9 percent. About 60 percent of survey respondents report paying more than $7,200 annually for an employee plus family plan.

Employee plus spouse plans cost employers more than $4,800 per year. Hospitality 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, hospitality organizations employed a variety of methods.  Increasing deductible levels was most prevalent at 52.4 percent, while increasing the employee portion of the premium followed at 51.8 percent. The results showed that 34.8 percent of organizations switched carriers. Increasing employee co-insurance levels was utilized by 26.8 percent of survey respondents.

Cost containment measures are also a popular option as 91 percent of organizations surveyed use coordination of benefits to bring costs in line. More than half of hospitality organizations employ disease management, pharmacy benefit management, pre-existing condition clauses and utilization reviews to contain costs. Pre-admission testing is utilized by 26.6 percent of survey respondents.

About the Survey
Compensation Data 2010 Hospitality contains data on over 100 industry-specific job titles and more than 250 benchmark titles ranging from entry-level to top executives. Data is collected annually from hospitality 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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