About a week ago, I spoke on a panel at the annual convention of the New England Human Resource Association with a fellow by the name of Ron Leopold. Ron’s an MD who currently serves as a Vice President at MetLife. He gave a very interesting presentation, and included some fascinating national employer and employee survey data. I thought two of his findings were worth mentioning here — and I may be back with more over time.

First, most employees (60%) believe they’re paying for a greater share of their health insurance costs. No surprise there. My guess on that is they probably are. The more interesting finding was the employee’s view about how much the employer was paying to fund employer-supported health insurance premiums. 55% of employees surveyed believe their employer spends less than $3,000 a year on health insurance benefits. Another 32% thinks it’s between $3,000 and $7,500, and only about 15% of employees surveyed believe the number exceeds $7,500 per employee per year.

While it varies from region to region — and from employer to employer — it would be fair to say that in most markets, and for most companies, the average cost per employee would be somewhere north of $7,500.

So while over 80% of senior executives believe getting a handle on health insurance costs is a major priority for them, only a small number of their associates and employees actually understand just how much their employer is spending on providing them with health insurance benefits in the first place. This is disappointing and troubling. People in the “biz” have been saying for two decades that employers need to do a better job of educating their employees about how much they spend on health insurance. It’s either not sinking in with employers, or employers haven’t figured out how to bring this information to their employees in a way that they can understand it.

That may be because senior executives, according to the same survey, believe that recruiting and retaining talent is a bigger priority than managing health insurance costs. And most senior execs expect the competition over talent to intensify over the next two years.

No wonder employers feel like they’re in a bind. Their costs are going up, their fight for talent is fierce, and their employees are unhappy about spending more of their own money on health insurance and health care, but don’t appreciate — by a wide margin — how much money their employers are already spending on their cost of care.

Harvard Pilgrim the employer has made cost transparency for its own employees a primary objective. We publish both the employer and the employee share of health insurance costs on every payslip, use a structured, defined contribution for individual, two-person and family coverage for our own employees, and rely on an active open enrollment process each year when our people sign up for benefits. I would hope our folks know how much money is on the table. When we finish open enrollment this year and survey staff afterward, we’ll include some questions on the cost of insurance — and see what comes up.

In the meantime, I would urge my colleagues in the employer community to over-communicate on this one. If people don’t know how much money’s involved, it’s hard to get their attention.

Posted by Charlie Baker in Employer, Health Care Costs