Indiana Business looks at employee benefits.

November 2006

Each October, Indiana Business magazine offers its annual review of employee benefits being offered to Hoosier workers.

“Compensation Data 2006” is compiled each year by Kansas-based Compdata Surveys, and includes extensive information on what Indiana workers are paid in various positions. However, it is the survey’s pages on health care benefits that tend to draw the most interest these days.

Good News/Bad News
“There’s good news and bad news,” Amy Kaminski, a Compdata manager told Indiana Business. “The good news is health insurance premiums in Indiana are increasing at a lower rate for the fifth straight year. The bad news is health insurance rates are still increasing.”

In Indiana, the average health insurance premium increased by 12.8 percent this past year — down from 13.8 percent last year and 16.3 percent in 2004, Kaminski said.

Cost Shifting Continues
The survey found, not surprisingly, that the increased premium costs mean more costs are being shifted to employees. This year, 41 percent of the just over 500 Indiana companies who participated in the survey said they would increase the employee’s portion of the health premium.

How did they accomplish that?
Thirty-four percent said they increased deductible levels, while 6 percent reduced benefits overall.

HSAs Slow To Start in Indiana
Health Savings Accounts, or HSAs, were offered by only 13.6 percent of the companies surveyed. Just over 12 percent offered some sort of Health Reimbursement Account (or HRA), half with a high-deductible plan.

Interest in HSAs has remained somewhat slower in Indiana, according to John Boss, senior vice president of Aon Consulting of Indianapolis, a supporter of HSAs.

Hoosiers’ Health Status a Factor
Indiana’s average increase in insurance costs in the past five to seven years has outpaced many other areas of the country, Ken Williams, a benefits specialist with Tobias Insurance Group, said.

“Indiana has some notoriety because of heart conditions, high blood pressure, smoking and lifestyle issues,” Williams said.

Rx Costs Also Cited
Pharmaceutical costs continue to get employer’s attention, with the survey finding most already using a three-tiered drug reimbursement arrangement, and some even using four-tier arrangements. More than 74 percent of employees have a flat dollar co-pay amount, while smaller percentages are responsible for a portion of the co-pay amount, no copay or have a combination of a flat and percent arrangement.

“Drug costs are skyrocketing, not only for hospitals, but (also those) prescribed in doctor’s office,” said Dr. Michael Schatzlein, CEO of Dupont Hospital and COO of Lutheran Health Network of Fort Wayne. Dr. Schatzlein blames, in part, direct-to-consumer advertising of new and sometimes more expensive drugs.

Indiana Business magazine also took up the issue of whether mandated health insurance plans, such as the one adopted in Massachusetts, should be pursued in Indiana as a means of lowering costs.

Big and bigger

Who are Indiana’s largest employers?
Indiana has a solid reputation as a “strong work ethic state” — so who are the largest employers of Hoosiers? Indianapolis Business Journal offers these rankings for 2006 based on the number of full-time employees based in Indiana:

Wal-Mart Stores, Inc. — 37,197
U.S. government — 33,642
State of Indiana — 31,851
Indiana University — 16,115
Purdue University — 14,262
Eli Lilly & Co. — 13,161
Clarian Health Partners — 12,438
General Motors Corp. — 10,862
Mittal Steel USA — 10,720
St. Vincent Health — 10,384
Marsh Supermarkets, Inc. — 8,949
Community Health Network — 7,685
City of Indianapolis-County of Marion — 7,006
U.S. Steel Corp. — 6,740
Indianapolis Public Schools — 5,936
Delphi Corp. — 5,625
AT&T Indiana — 5,500
Cummins, Inc. — 5,370
FedEx Corp. — 5,000
Toyota Manufacturing Indiana, Inc. — 4,700
Rolls-Royce Corp. — 4,300
Fort Wayne Community Schools — 4,107
Kimball International, Inc. — 3,675
WellPoint, Inc. — 3,600
JPMorgan Chase — 3,521