Employee health insurance cost rising again

— -- Good health is the gift that keeps on giving. Not only do you feel better, you probably paid less for health insurance than some of your co-workers. In recent years, many large employers have passed on the rising cost of health insurance in the form of higher deductibles and co-payments — costs borne primarily by those who use health care.

This year, though, the pain will be shared, according to an analysis by Towers Watson, a human resources consultant. Employers will pass on cost increases primarily through higher employee premium contributions. Towers Watson projects that 66% of companies will increase employees' share of premiums for single-only coverage in 2012, and 73% will increase the share of premiums for dependent coverage. Another survey by the National Business Group on Health found that 53% of employers plan to increase employees' share of premiums, while 39% plan to increase in-network deductibles.

If there's any good news to be found, it's that the increase in overall costs of providing health care to employees has slowed. Tower projects an increase of 5.9% in 2012, down from 7.6% in 2011. Mercer, another human resources consulting firm, predicts that employee health care costs will rise 5.4% in 2012.

That's small consolation, though, to employees whose income hasn't kept pace with the rise in health care costs. In August, personal income fell 0.1% from July, driven by a decline in wages and salaries, according to the Bureau of Economic Analysis.

With open enrollment season underway at many companies, here's what you can expect to see:

•Higher costs for dependents. The health care reform law enacted last year requires health insurers to allow adult children to remain on their parents' health insurance plan until age 26. More than 2.3 million young adults have been added to insurers' plans since the law was enacted, according to the Kaiser Family Foundation. Increasing premiums for dependent coverage is one way employers are dealing that that requirement, says Beth Umland, research director for health and benefits at Mercer.

•More spousal surcharges. It's not uncommon for working couples to compare their employers' health insurance options and sign on to the one with the most generous plan. However, this is a practice many employers want to discourage, since covering more family members increases their costs. Spouses are even more expensive to cover than adult children because they're older and more likely to get sick, says Helen Darling, chief executive of the National Business Group on Health.

Employers are increasingly imposing a surcharge on coverage of spouses who have access to their own employers' plans, says Julie Stone, senior consultant with Towers Watson. Twenty percent of employers surveyed have a spousal surcharge, and an additional 25% are considering it, she says.

That means employees need to take a close look at the cost of adding a spouse to their plans, says Craig Rosenberg, national practice leader for consulting firm Aon Hewitt. If your company has added a surcharge, it may be cheaper for both spouses to use their own employer's coverage, he says.