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The survey was conducted in late fall 2008 through early 2009. All respondent data were returned before the inauguration of the new administration, providing tri-state employers with baseline data to gauge how their healthcare costs will be affected by healthcare reform.

 “We’re already starting to see how legislative activity is affecting employer-sponsored plan costs,” said Cowden Associates Executive Vice President Vince Wolf. “For example, compliance with COBRA changes and mandated benefit changes, such as mental health parity, are expected to contribute to cost increases in the coming years.”

At the same time, however, the promise of national healthcare reform can put downward pressure on other cost trends.

“Historically, when healthcare reform has been high on a new president’s agenda, such as when President Clinton took office in 1993, some employee benefit costs have decreased,” Wolf said. “I expect we will see both upward and downward pressure on cost trends. As 2009 unfolds, we’ll get a much clearer sense of which direction particular trends will move under President Obama.”

Cowden Associates, the region’s leading independent human resources, compensation and employee benefit consulting firm, compiled results of its 2008-2009 survey from 230 employer participants throughout the tri-state region of Ohio, Pennsylvania and West Virginia. For-profit, nonprofit and governmental employers are among the participants. Size of employers ranged from less than 100 employees to more than 10,000.

Healthcare renewal costs for tri-state employers rose 7.2 percent in 2008-2009, compared to 5.7 percent in 2007-2008. This year’s increase represents the first time in five years that the growth rate was not lower than the previous year’s. In addition, this year marks the first time that the tri-state region’s increase was higher than national reports of 6.8 percent.

Although premium costs increased, tri-state employers continue to shoulder the majority of premium cost. Employees share about the same percentage of cost as they did last year. In 2008-2009, employees contributed 20.1 percent for individual coverage and 25.5 percent for family coverage.

As employers search for options to reduce their healthcare costs, high-deductible health plans are an often-discussed alternative. Yet, according to Cowden Associates’ survey, employers in the tri-state region are reluctant to provide HDHPs as their primary plan offering. Growth of the plans as the primary plan offering has remained relatively flat. In fact, 79 percent of survey participants report they are not interested in implementing or likely to implement HDHPs as a future offering.

Worksite wellness programs also continue to gain momentum as a cost-containment strategy. This year’s survey found that 46.1 percent of participants have wellness programs in place and another 47 percent indicated they are considering such programs. Participants indicate that gift cards (26 percent), cash (23 percent) and reduced employee benefit contributions (14 percent) are incentives that help to drive participation.

“With a new president who has made healthcare reform one of his top priorities, the coming year could be one full of change for everyone who has a stake in employee benefits – from employers, to employees, to healthcare providers, to insurers,” said Jere Cowden, president and CEO of Cowden Associates. “Our eighth-annual survey provides an excellent snapshot of where employers are today in terms of managing this substantial cost while balancing the need to provide a good benefits package that will attract and retain top talent. This year’s survey also may serve as a benchmark against which recent and upcoming healthcare reform legislation can be measured.”

About Cowden Associates, Inc.
Cowden Associates is a Pittsburgh-based consulting and actuarial firm with a dedicated and experienced team of professionals with extensive experience in health and welfare, retirement, plan design, compensation, employee communications, benefits enrollment, actuarial and technology services. The firm is committed to providing the highest level of service through industry-leading professionals with experience equal to or greater than typically expected at the largest national firms.

Cowden Associates is a charter member of United Benefit Advisors (UBA), an alliance of the premier independent benefit advisory firms in the nation.

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