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Health Benefit Costs Vary Widely by Industry, SHRM Benchmarking Shows
 

By Andrew Mariotti, SHRM Customized Research Services  11/10/2010
 

Health care costs per covered employee in the U.S. vary significantly by industry and other factors, according to the 2011 Society for Human Resource Management (SHRM) Health Care Benchmarking Survey.

The survey, created by SHRM’s Strategic Research Program and reviewed by SHRM's Total Rewards Special Expertise Panel, collected health care metrics across a variety of U.S. industries in 2011, including data on premiums, cost sharing, deductibles, co-pays, self-insurance and stop-loss coverage. In addition, organizational data such as employee size and geographic region were obtained. The data reflect plan year 2010, along with expectations for revenue change in 2011.

In February 2011, an e-mail that included a link to the SHRM Benefits Benchmarking Survey was sent to 13,000 randomly selected SHRM members who were HR managers, assistant or associate directors, directors, assistant or associate vice presidents, vice presidents or presidents. Of these, 2,558 senior HR professionals responded on behalf of their organizations, yielding a response rate of 20 percent. The survey was accessible for eight weeks.

Sample Results

The following U.S. industries spent the most on health care per covered employee during plan year 2010. Taking into account both employer and employee expenses including premiums, cost sharing and other coverage costs, the survey revealed.

Highest Total Annual Health Care Cost Spending per Covered Employee:

Industry

Number of Respondents

Mean

Utilities

19

$20,567

Insurance

64

$14,132

Real estate

38

$11,554

Government

180

$11,406

Manufacturing

263

$11,114

Source: SHRM Customized Benchmarking Service.

The following U.S. industries spent the least on health care per covered employee during plan year 2010.

Lowest Total Annual Health Care Cost Spending per Covered Employee:

Industry

Number of Respondents

Mean

Telecommunications

44

$5,626

Publishing, broadcasting and other media

33

$6,171

Accommodation and food services

39

$6,355

Arts, entertainment and recreation

30

$6,549

Business support services

81

$7,188

Source: SHRM Customized Benchmarking Service.

Reasons for Cost Variations

There are many reasons that might account for the differences in spending, according to SHRM research analysts, such as:

Industries that hire more unionized employees might have richer health care plans.

Industries with an aging workforce might have more health claims than industries that employ a young workforce.

Employers' Costs

In addition to total per-employee cost spending, the survey showed that the type of health care plan offered affects employers' health care costs. For example, the average monthly employer contribution to a consumer-driven health plan in 2010 was $258, but for a preferred provider organization (PPO) plan it was $420.

Employer/employee cost-sharing also affects organizations' health care costs. Industries that compete more for talent might contribute more—or all—of the monthly premium to attract and retain employees.

Quality Control

Data for the 2011 SHRM Health Care Benchmarking Survey went through a rigorous process to verify that quantitative questions were understood by respondents and that the data submitted were accurate. For example, the total cost of health care paid by the organization had to be less than the total cost of operating expenses for the organization.

Overall, there were few inconsistencies identified in the data. When an inconsistency was identified, steps were taken to resolve it. If the data could not be verified and appeared to be inaccurate, they were excluded from the analysis. This was done to ensure that the highest quality data were included in the study.

Andrew Mariotti is a strategic research analyst at SHRM.  

SHRM Customized Benchmarking Service

The SHRM Customized Benchmarking Service uses more than 400 benchmarks and draws on a database of 10,000 organizations. Reports can be customized based on industry, employee size and other factors.

For more information about SHRM Customized Health Care Benchmarking reports, as well as customized reports on Human Capital Benchmarking, Retirement and Welfare Benchmarking, Employee Benefits Prevalence Benchmarking, and Job Satisfaction and Employee Engagement Benchmarking, call 703-535-6366 or visit www.shrm.org/research/benchmarks.

Related Articles:

Employers Accelerate Efforts to Control Health Costs, SHRM Online Benefits Discipline, November 2011

Costs of Employer Health Plans Vary Widely by State, SHRM Online Benefits Discipline, October 2011

Per Employee Health Coverage to Cross $10,000 Threshold, SHRM Online Benefits Discipline, October 2011

Average Family Health Premiums Top $15,000 in 2011, SHRM Online Benefits Discipline, September 2011

Large U.S. Employers Revamping Health Benefits for 2012, SHRM Online Benefits Discipline, August 2011

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform Resource Page

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