2007 Benefit Planning
Health care costs increases for 2007 are predicted to be the lowest in years. According to Hewitt Associates, most health care plans should see an average cost increase of 7.7% in 2007. Despite this seemingly modest increase, it still outpaces inflation and employee salary increases. For example,
In 2007, Hewitt projects, salaried employees can expect a base salary increase of 3.7 percent.1 Therefore, an employee making $40,000 today who receives the average salary increase ($1,480) will use 16 percent of that salary increase to pay for the increase in health care costs next year.
A few metropolitan areas, however, will continue to see double-digit increases. These include San Antonio (13.1 percent), St. Louis (13 percent), Hartford (12.8 percent), Milwaukee (11.4 percent), Cleveland/Akron (10 percent) and San Francisco (10.5 percent). In addition, Hewitt expects the following increases by plan type:
- 7.0 percent for preferred provider organization (PPO) plans
- 8.0 percent for health maintenance organization (HMO) plans
- 9.0 percent for point-of-service (POS) and indemnity plans.
Scary to think that this is actually good news.