Fortunately, or unfortunately, I am of a generation of workers who can remember a short period of time in my career when employer provided health insurance premiums were paid 100% by the employer. Sometime in the 1980's the term HMO entered the company benefit vocabulary with new terms and acronyms such as co-pay, PPO, employee portion, PCP, in network, out of network, HSA etc. soon being added at a dizzying rate.

The downward spiral of employee compensation being withheld to pay for healthcare premiums started innocently enough with companies saying that to keep ahead of rising healthcare premium costs and maintain 100% premium payments, employees would need to pay a small 'co-pay' for doctor visits and prescription drugs. Little by little employees paid more out of their pockets for often reduced coverage each year. In fact here at HRN our annual benefits review meeting started with a comment by our plan administrator that once again our premium costs have gone up meaning employee contributions will also increase. And guess what? Nobody even questioned it. We expect it. We’ve become numb to it. We don’t like it but what can we do? So we take it.

To be fair, employers are also being gouged by rising premiums and to remain competitive and profitable had to do something to mitigate the skyrocketing costs. Get this . . . hospitals regularly charge employers more for medical services than the rates set by the Centers for Medicare and Medicaid Services as a way to make up for revenue lost by treating people who do not have health insurance.

Employee contributions through payroll deductions, especially for employees with dependents can add up to many hundreds of dollars per month and thousands of dollars per year. Add in additional out of pocket expenses for deductibles, copays, and exorbitantly priced, slickly marketed prescription drugs and what you have in effect is a growing percentage of employee compensation (and employer gross income) being allocated to health insurance expenses.

A survey released Tuesday, August 28 of 1,223 employed U.S. adults by Harris Interactive and sponsored by human resources software firm Kronos, found exceptional health care coverage to be the most desired benefit currently not offered by employers. Among benefits employees currently do not have, 100 percent coverage of health care costs by the employer is considered a more desirable benefit to employees than competitive salary.

The other dark side to the health care crisis in this country is that more and more employers simply cannot afford to provide coverage to their employees. The Census Bureau reported Tuesday, August 28, that the percentage of people covered by employer-based health insurance decreased to 59.7 percent in 2006, from 60.2 percent in 2005, a factor contributing to the rise in the number of uninsured throughout the population. The percentage and number of uninsured Americans rose in 2006 to 15.8 percent, or 47 million, up from 15.3 percent, or 44.8 million, in 2005. Similarly, the percentage of children under 18 without health insurance increased to 11.7 percent, from 8.7 percent in 2005. The percentage of Americans covered by government health insurance programs dropped to 27 percent, from 27.3 in 2005. The high cost of health insurance has for years been a top concern for American businesses.

The only good news seems to be that annual employer health insurance premium increases seems to be slowing and is now at about 7.7% per year.  . . still well ahead of the national rate of inflation but the gap is narrowing.

I’m not so idealistic to expect any employer I work for to ever again offer 100% health insurance coverage but it sure would be nice if my out of pocket contributions would stabilize or be reduced. Imagine actually being able to consider each dollar of your hard earned annual merit increase as additional income and not simply additional money to cover rising employee paid health care premiums.