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Employee Health Costs Rose 7.7 Percent in 1986, Survey Shows

January 20, 1987

NEW YORK (AP) _ The average cost of employee health benefits rose 7.7 percent last year, increasing the annual liability to business for health care to $1,857 per worker, according to results of a survey released Tuesday.

The survey conducted by the HealthGroup division of Johnson & Higgins, a major insurance broker and employee-benefits consultant, also said companies increasingly expect employees to pay a bigger share of the costs.

″As the source of health insurance for nine out of ten working Americans, employers play a key role in the financing of our nation’s health care system,″ said David Rahill, the division’s vice president and manager. ″Because of the continued rising in costs, managing these expenditures will be the leading health care issue for the rest of the decade.″

The survey showed significant regional variations in annual costs, reaching a high of $2,173 per employee covered in the Pacific region, compared with a low of $1,692 for South Atlantic workers.

Costs-per employee climbed to $2,255 for employers with more than 50 percent of their workforce under a collective bargaining agreement, while costs averaged $1,764 for employers with less han half their workforce under such agreements, the survey showed.

Johnson & Higgins said results of the survey were based on more than 250,000 responses by 1,500 companies in 36 states. Founded in New York in 1845, Johnson & Higgins is one of the world’s largest privately owned employee-consulting and insurance brokerages.

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