Rick Munn pays as much for his health insurance each month as he does for his mortgage. The chief financial officer of Merit Electric, 4700 Innovation Drive, has seen the company deal with 30 to 40 percent increases in health-care costs and accompanying cuts in coverage.

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He has also seen many younger employees risk going without health care. And Munn is not alone.

Prepare to pay up for health benefits.

As another year approaches, Fort Collins employers are facing the same nationwide dilemma plaguing other business - managing the increasing costs of health care.

The continued hikes - driven by changes in medical technology and rising drug costs - show no sign of abating although the growth seems to be slowing.

United States companies will notice a nearly 10 percent rise in health-care costs for 2006, following a 9.2 percent increase for 2005 - the lowest rate increase in six years, according to Hewitt Associates, a global human resources services firm.

Employees will still notice additional out-of-pocket expenses for the year ahead. Total health care employee contribution and out-of-pocket costs are projected to jump 12 percent to $3,136 in 2006, according to Hewitt.

As a result, companies across Fort Collins are looking at ways to cut or modify health-care coverage in a move to save costs — and employees are noticing the difference.

“The costs continue to go up and limit what we can provide,” Munn said. “At some point it becomes limited by personal cash flow.”
Hitting home

Fort Collins’ largest employer is planning to look at alternative coverage ideas in the future to deal with the rising cost of health care.

Colorado State University may explore the possibility of health savings accounts and coverage changes to increase cost efficiency in the coming years.

In 2006, healthcare costs at CSU will rise 9 percent, on top of a 5 percent increase in 2005, said Carol Shirey, director of human resources for CSU.

The university covers about 2,400 employees on three different plans and determines their rate increases by evaluating the U.S. Department of Labor’s medical Consumer Price Index and individual claims history, as well as talking with benefits consultants, Shirey said.

“We knew there’d be a rate increase, it was just a matter of how much,” she said.

CSU carries a “cafeteria-style benefit plan” with no employer subsidies and a monthly reserve for the purchase of health-care options that best fit the employee’s needs, Shirey said.

CSU will pay about $335 per employee for the purchase of benefits, up from $321 per month in 2005.

City of Fort Collins employees can also expect some changes as the city shifts $1 million from its health care burden to employees.

“Things are going to be changing quite a bit,” said Rick DeLaCastro, director of human resources for the city of Fort Collins.

As a result, total employee premiums will increase $600,000 while employees will face higher co-pays and deductibles.

Employees who once paid a 5 percent premium saw their premium rise to 15 percent in 2005 and will continue to see a 5 percent increase for 2006 and 2007, DeLaCastro said.

Still, the city’s 1,200 covered employees have several options within the system.

There are four levels of coverage, which range from no increase to a 35.5 percent hike for coverage in 2006. The city will still have a plan with no monthly fee and a high deductible.

Conversely, the highest level of coverage would cost an employee and their family $255.65 a month in 2006, nearly $67 more than the 2005 price.

“We’ve seen an increase every year, but 2005, at least year-to-date, has been the lowest increase,” DeLaCastro said. “While the slope is still increasing, it is not increasing as fast as it was in previous years.”

Poudre Valley Hospital employee Lina Gonzales just received her 2006 benefit information. It’s going up about $40 per month. Still, she believes insurance is worth the additional cost.

“I look at it as kind of being bad, but I think I’d rather pay that every month, than spend $150 to $170 to see a doctor without insurance,” said Gonzales, 40. “It’s better to pay more for insurance than to not have it at all.”

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Source: The Coloradoan