Medical Insurance Rises in Hospitality Industry

Medical insurance costs are continuing to rise for hospitality industry employers across the country. The 2011 Compensation Data Hospitality survey results show companies reported an average premium increase of 9.3 percent. More than 45 percent of respondents indicated they pay more than $9,600 annually for an employee plus family plan.

"The rising cost of insurance premiums is something that continues to be an issue for employers," says Amy Kaminski, director of marketing for Compdata Surveys, the nation's leading pay and benefits survey data provider. "To counteract these rising costs, organizations have to look in different directions in order to continue providing quality coverage for their employees."

Premium costs remain high for hospitality employers, as 47.9 percent pay more than $7,200 for an employee-plus-spouse plan. Of survey respondents, 42 percent report paying more than $7,200 in premium costs for an employee-plus-children plan. Employee-only plans cost employers between $2,400 and $7,200 per year.

Employers are often forced to shift some of the cost to their employees in an effort to offset the increasing outlay. Organizations increased the employee portion of the premium at a rate of 54.3 percent, whereas 42 percent have increased deductible levels. More than 90 percent of organizations report utilizing coordination of benefits in an effort to avoid overlap of benefit costs.

One way to reduce costs to the employer is through the type of plan offered. More organizations are beginning to offer a high deductible health plan (HDHP) to employees. In 2011, 15.3 percent of hospitality companies reported offering HDHPs compared to just 9.7 percent in 2010. The most prevalent coverage offered among organizations is a PPO plan, offered at a rate of 74.6 percent. HMO plans are the second most common, offered by 29.1 percent of respondents.

About the Survey
Compensation Data 2011 Hospitality surveyed nearly 100 industry-specific job titles and 350 benchmark titles ranging from entry-level to top executives. Data was collected from nearly 200 hospitality employers reporting on more than 2,500 locations across the country. The results provide a comprehensive summary of pay data, benefit information, and pay practices with an effective date of March 1, 2011.

News and information presented in this release has not been corroborated by WTWH Media LLC.