Condition Critical: A Survey of Washington Businesses about the Future of Employee Health Care Benefits

An AARP telephone survey of employers in Washington State in March and April 2008 indicates that Washington employers have experienced substantial increases in employee health insurance premiums over the past 3 years, and most of the respondents anticipate that it will be challenging to provide such coverage over the next 3 years.

The survey findings indicate that:

• The cost of single-coverage employee health insurance has increased overall in the past 3 years by about 32 percent, and among smaller companies, the cost has nearly doubled.
• If current cost trends continue, most Washington employers are likely to maintain an employee health insurance plan but will consider passing the cost burden on to employees, particularly through higher premiums.
• The employers indicated a limit of what they can afford before dropping employee health coverage altogether—27 percent of the respondents said they would stop providing it if the cost increased by 15 percent; 40 percent would stop if the costs increased by 25 percent.
• Many respondents indicated that the rising cost of employee health coverage has reduced profits and raised consumer prices; however, many also view the health benefit as having a major positive impact on factors such as employee recruitment and retention, employee health, and the overall success of their business.
• Among employers who currently do not offer employee health coverage, one-third have done so in the past. Nearly half offered a plan up until just 3 years ago. At least half of these employers said their major reasons for no health plan include the company cannot afford it, their revenues are uncertain, and employees cannot afford it.

AARP commissioned Woelfel Research, Inc., to conduct the interviews with businesses drawn at random from the population of Washington State businesses. Government offices were excluded. A total of 407 businesses participated. For more information, contact Jennifer H. Sauer at 202-434-6207. (25 pages)