Zack Hutchins
Director of Communications

For Release — Wednesday, August 28, 2002


ALBANY—No longer able to bear the full burden of health-care costs that have been increasing much faster than inflation for many years, New York State employers in significant numbers are asking their workers to pay more of the costs of health insurance benefits, according to The Business Council's latest annual survey of New York State employers' compensation practices.

In particular, one-third of responding employers said their workers' share of health-insurance premiums increased in the 12-month period ending in April 2002, the period covered by the survey.

The new survey was conducted by Compdata Surveys of Kansas City, the survey company with the nation's largest database on pay and benefits information. Survey results are being published in Compensation Data New York 2002, The Council's annual survey of New York State employers' pay and benefits practices. The 586-page book is being released today.

"On Labor Day 2002, New York's workers should be concerned about how the effect of these costs on their take-home pay," said Business Council President Daniel B. Walsh. "Employers do everything they can to contain these costs, but they continue to go up far faster than inflation."

The survey showed that:

. Despite ongoing employer efforts to keep health insurance costs down, more than 75 percent of responding New York employers saw health insurance premiums increase in the 12-month period ending in April 2002.

. Among the most common kinds of health insurance programs, average increases ranged from 19.4 to 14.1 percent. In contrast, the rate of inflation in New York in calendar 2000 was only 3.2 percent. Between 1985 and 1999, the nation's rate of inflation averaged 3.2 percent.

Indemnity plans (in which patients can choose their own provider and pay established deductible costs for treatments, with their employers bearing the rest of the costs) went up an average of 19.4 percent.

Point-of-service plans (in which patients must choose providers from within an established network, but can seek care from providers outside the network, generally at a higher cost to the patient) increased an average of 14.4 percent.

Health maintenance organizations (HMOs) and preferred-provider organizations (PPOs) (which are insurers that contract doctors, hospitals, and other providers to provide all regular needs of their insured customers) had average cost increases of 14.8 percent and 14.1 percent, respectively.

. One-third of respondents (33.5 percent) increased employees' share of the premium. In the same 12-month period a year earlier, that percentage was 28.6 percent.

. Nearly 23 percent of respondents increased deductible levels, up from 16.5 percent in the previous year.

. Nearly one in five respondent employers (18.1 percent) increased employees' co-payments for office visits.

"Health insurance costs in New York are about 25 percent higher than the national average, and until now, the harm to workers has been only indirect," Walsh said. "That's because employers have paid this cost for decades, so New York's workers have suffered the less visible indirect effects of higher costs of job creation: less money for other compensation and benefits, and less job opportunity generally.

"Now, New York's above-average health insurance costs are slicing into workers' checkbooks more directly. Workers should start asking what Albany can and should do to rein in New York's health-care costs."

Background on the survey: The Business Council sponsors the survey each year to collect information on pay, benefits, and related issues for New York State employers. The survey is the largest of its kind in the state with data from hundreds of organizations on more than 374,803 incumbent workers in more 461 job titles, ranging from entry-level positions to top executives. This is the sixth year that Compdata Surveys has conducted this survey and The Business Council has published its results.

The book provides information on pay and benefits broken down by region, number of employees, and industry sector. For all job titles, the sample size is reported. All industries except agriculture and retail stores are covered.

How to order: Compensation Data New York 2002 is available for $640, with major discounts for employers that agree to submit data in next year's survey. Organizations interested in participating in New Year's survey can buy a two-year subscription, and receive the 2002 survey for $380. For information or to order a copy, visit compdatasurvey.com or call Shawna Simon or Theresa Worman at Compdata Surveys at 1-800/300-9570, or Ellen Fobare at The Business Council Insurance Fund at 1-800/445-2023.