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Business Journal poll finds health benefits for dependents under increasing pressure

NORTH BAY, Nov. 12, 2008 – Nearly a third of employees responding to a BUSINESS JOURNAL health care survey said benefits for dependents have been cut back or soon will be, a trend experts said demonstrates an acceleration in the number of people losing coverage.

“The system is broken,” said one employer who responded to the survey. “We haven’t been able to provide coverage for the last two years.”

The survey created by the BUSINESS JOURNAL and presented at the newspaper’s annual health care conference this morning was conducted on its Web site. The survey asked employers and employees to anonymously answer 12 questions related to their insurance purchasing experience and how it has changed in the last year.

The sample included a range of industries with the majority at 18 percent in construction, followed by about 13 percent in professional services and about 12 percent in the service/recreation/retail industries. Others represented include manufacturing, nonprofit, health care, real estate and others.

The results confirmed trends that already exist in the market, including increasing cost of premiums and reductions in employer coverage, but at a much accelerated rate.

“What we are seeing is more and more businesses saying, ‘We really don’t want to do this anymore. We can’t afford it.’ Especially with the economic climate, soon the bubble will burst,” said Shana Alex Lavarreda, a senior research associate for the UCLA Institute of Public Policy, which conducted its own survey on employee benefits in 2007.

The BUSINESS JOURNAL results compare closely to results from a national survey released in September by the Henry J. Kaiser Family Foundation and Health Research & Educational Trust.

The benefits survey reported that about 40 percent of employers plan to increase their employee contributions to premiums and that 41 percent plan to increase deductibles. Another 45 percent said they would increase co-pays, and 6 percent said they would cut coverage all together.

Respondents to the BUSINESS JOURNAL survey also reported a sizeable increase in the cost of providing care with close to a quarter of employers spending 15 percent or more of their budgets on benefits.

“It’s increased by 12 and 30 percent in the past two years,” one respondent wrote in the survey.

The same employee benefits study from Kaiser found that premiums have increased by 119 percent in the past eight years and 5 percent just in the last year.