Medical-insurance costs on the rise for manufacturers and distributors

August 26, 2011    

Original Article: AllBusiness.com

Medical-insurance costs are continuing to rise for manufacturing and distribution employers across the country, according to a new national survey.

The 2011 Compensation Data Manufacturing & Distribution survey results show manufacturers and distributors reported an average premium increase of 11 percent. Sixty-five percent of respondents indicated they pay more than $9,600 annually for an employee plus family plan.

“The rising cost of insurance premiums is something that continues to be an issue for employers,” Amy Kaminski, director of marketing at Compdata Surveys, said in a news release. Compdata Surveys is a national compensation survey data and consulting firm, based in Kansas.

“To counteract these rising costs, organizations have to took in different directions in order to continue providing quality coverage for their employees,” she added.

Premium costs remain high for manufacturing and distribution companies as 64.3 percent pay more than $7,200 for an employee plus spouse plan. More than 55 percent of survey respondents report paying more than $7,200 in premium costs for an employee plus children plan. Employer-only plans cost employers between $2,400 and $7,200 per year.

Employers are often forced to shift some of the cost to their employees in an effort to offset the increasing outlay. Organizations increased the employee portion of the premium at a rate of 62.6 percent, whereas 46.7 percent have increased deductible levels. Eighty-four percent of organizations report utilizing coordination of benefits in an effort to avoid overlap of benefit costs.

One way to reduce costs to the employer is through the type of plan offered. More companies are beginning to offer a high-deductible health plan (HDHP) to employees. In 2011, 26.4 percent of manufacturers and distributors reported offering HDHPs compared to just 14.8 percent in 2009. The most prevalent coverage offered by manufacturing and distribution employers is a PPO plan, offered by 86.7 percent of firms. HMO plans are the third most common, offered by 20.8 percent of respondents.

Compensation Data 2011 Manufacturing & Distribution surveyed more than 100 industry-specific job titles and 350 benchmark titles ranging from entry-level to top executives. Data was collected from nearly 1,100 manufacturing and distribution employers reporting on more than 9,500 locations across the country, effective Feb. 1, 2011.

Original Article: AllBusiness.com

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