Medical

benefits

costs

rising

in region

Employers ask employees

to share more

of the cost

BY KREMENA TODOROVA

Journal Staff Writer

NEW ULM -- The average monthly cost of single medical coverage for full-time employees in south central Minnesota was $331 in late 2003, according to a recently analyzed survey by the state Labor Market Information Office.

The cost of family coverage was $637.

The survey, of 391 firms, was piloted in the counties of Blue Earth, Brown, Faribault, Le Sueur, Martin, Nicollet, Sibley, Waseca and Watonwan, with the intention of expanding it statewide. The businesses were randomly chosen, based on industry and size. With inquiries sent to 599 firms, the response rate was 65 percent.

Fifty-four percent of the companies polled reported that they offer single medical coverage, and 50 percent said they offered family coverage, to full-time employees.

Fifty-two percent of the companies that offer coverage said that single premiums were jointly paid; 56 percent reported that family premiums were jointly paid. Forty-four percent of the firms paid entirely for single coverage, and 25 percent paid entirely for family coverage. The balance offered a plan but contributed nothing toward its cost.

With benefits costs rising, rather than discontinuing benefits altogether, employers are asking employees to share more of the cost, the survey says.

On average, a full-time employee was asked to pay $95 a month for single medical coverage in late 2003, while family medical coverage was likely to cost that employee $313 a month.

The industries requiring the lowest employee contributions were natural resources and mining ($45 for single, $229 for family) and manufacturing ($85 for single, $249 for family).

Professional and business services required the highest level of full-time employee contribution, at $153 for single and $391 for family coverage.

Large companies -- defined as companies with 250 employees or more -- required the lowest outlay by employees, the survey confirmed. The authors attribute that trend, in part, to large companies' ability to negotiate better contracts with insurance carriers.

In line with popular perception, part-time employees are less likely to get medical coverage and also share more of the cost, the survey shows. Just 11 percent of part-time workers are offered single coverage, and 10 percent are offered family coverage. The coverages cost these employees an average $104 and $359 a month, respectively.

In terms of benefits distribution by industry, information, manufacturing, public administration, education and health services are more likely to offer benefits than are leisure, hospitality and service industries.

Other highlights:

* The two benefits most commonly paid in full by employers are long-term disability, where 75 percent of firms pay the entire premium for full-time employees, and life insurance, where 73 percent of employers pay the full cost.

* For full-time workers, the most common paid leave benefit is vacation, offered by 88 percent of the firms.This number falls sharply for paid sick leave, offered by 51 percent of the firms.

* Thirty-seven percent of the companies offered full-time workers a non-production cash bonus, and 26 percent offered flexible spending accounts.

The least common benefit in the region was the one that cost the least -- telecommuting. Only 3 percent of full-time workers are offered telecommuting. The survey suggests that the low popularity of telecommuting may be due to Internet connectivity concerns and employers' discomfort with a new, alternative work arrangement.