Cost of subsidizing employee health insurance rises

KANSAS CITY STARSeptember 10, 2013 

As employers prepare for new employee coverage requirements in 2014, they’re already dealing with higher costs of subsidizing employee health insurance.

The U.S. Bureau of Labor Statistics said the average per-employee cost for private-sector employers that provided health benefits — currently provided at employer discretion — was $2.26 an hour in March. That compares to an average of $1.92 in mid-2008.

At the end of the first quarter this year, the average total cost of employee compensation for employers was $31.09 per employee hour worked. That compares to $28.46 five years ago.

In March, the average cost to employers for wages and salaries was $21.50 an hour, while the average cost of employee benefits was $9.59 an hour. Benefits costs accounted for 30.9 percent of total compensation costs, a percentage that has stayed fairly constant.

The overall average is skewed higher because of higher public-sector pay and benefits. Total costs for private-sector workers averaged $29.13 an hour, while state and local government employers paid an average of $42.12 per employee hour worked.

In the private sector, legally required benefits, such as Social Security, Medicare, unemployment insurance and workers’ compensation insurance, accounted for 8.2 percent of compensation costs for employers.

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