Health insurance is becoming the most expensive cost of doing business and employers are being forced to pass on the costs to their employees. Employers are also considering other options that workers don't find so attractive like reduced benefits, higher premiums and delaying pay raises to pay increased coverage costs.
The coast office of Godwin Guice is a small business with 17 employees. Until last year, co-owner Reed Guice paid for all his employees health benefits. But he says rising costs forced him to make changes.
"What we've done is given our employees a choice. We will continue to pay a 100% if they will accept an extremely high deductible. By extremely high I mean a $2500 deductible which would only cover catastrophic medical occurrences," he told WLOX.
Guice says if his employees want a lower deductible, they have to pay for it.
Biloxi city workers don't have to make that choice. Since 1997, the city has paid a hundred percent of its employees health costs. The city puts money in a reserve each year and that money pays for employee claims. Pat Van Domelen, the city's Human Resources Manager said the city has built up a reserve in funding that amount to $3.7 million, "so that this year even though we're expecting a 19% increase in claims, our funding that we're putting in our contingency fund will not have to be increased at all. As a matter of fact it's a slight decrease because we've built up a healthy reserve over the last five years."
Each year the city projects what its claims will be and the city funds 120% to 125% of the claims.
"We had an excellent claims year last year and due to that claims experience we didn't even spend what was projected last year."
Van Domelan says good management and sound finances put the city in a position most governments and businesses wish to be in.
Guice says he's not sure how secure the coverage he offers his workers will be in the future.
"We're going to continue to try to give our employees the best health coverage that we can afford but as those cost rise we expect more and more of the cost of health insurance will have to be born by the employee and not the company."
Guice says health care is a necessity, but as the price continues to skyrocket, he says employers and their staffs may be forced to decide what benefits they can live without.