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Archived News Release--Caution:
information may be out of date.
For more information call: (202) 219-8211
The rate of growth of employers' costs for health insurance has slowed
since 1989, and particularly after 1995, according to a new Labor Department
report released by Secretary of Labor Robert B. Reich.
The report, "A Look at Employers' Cost of Providing Health Benefits,"
shows that since 1995, employer costs for health insurance have grown slower
than wage and salary costs. For the 12 months ending in June 1996, employer
health insurance costs increased by 0.1 percent, substantially lower than the
0.6 percent increase in 1995 and the 5.0 percent increase in 1994.
"Given the dramatic drop in costs, it is possible for employers to
provide more generous wages and they are doing so," Reich said.
Reich added that, "while the fall in employer health insurance costs is
good news, it appears that at least part of this decline is the result of more
employees shouldering a larger share of health insurance costs. This report
illustrates that workers will need to use some of any wage increase to pay
higher health insurance premiums."
The report cites four reasons behind the fall in employer costs for
health insurance including
- the rise in health care costs slowed considerably;
- employers switched to lower-cost managed-care plans;
- employees paid a larger share of the costs of employer-provided
health insurance; and
- the number of employees receiving employer-sponsored health insurance
fell.
The Employment Cost Index (ECI) released by the Labor Department on
July 30 indicated a 0.1 percent 12-month rise in nominal employers' health
insurance costs, one of the lowest 12-month increases since the series began in
1983.
The report, prepared by the Office of the Chief Economist, along with a
technical appendix, can be obtained from the Labor Department's Office of
Public Affairs by calling 202/219-8211.
Archived News Release--Caution:
information may be out of date.
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