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Home>Health Insurance> Philadelphia Inquirer Examines Salary-Based Contribution Systems for Health Insu
Philadelphia Inquirer Examines Salary-Based Contribution Systems for Health Insu
The Philadelphia Inquirer on Thursday examined the increased number of companies in the Philadelphia area that have begun to link employee contributions toward health insurance premiums to their salaries. Jennifer Calhoun, a senior consultant at Mercer Health and Benefits, said that about 12% of companies in the Philadelphia area with 500 or more employees have established salary-based contribution systems. "Employers are struggling with how to pass along these fixed increases in heath care premiums every year," Calhoun said, adding, "At the same time, they recognize that lower-paid employees cannot absorb as much of these costs." GlaxoSmithKline, which has about 6,000 employees in the Philadelphia area, established a salary-based contribution system earlier this year. Judy Lynch, vice president of U.S. benefits at GSK, said that the system has five ranges of employee salaries. GSK employees in the highest tier contribute $202 monthly toward health insurance premiums, and workers in the lowest tier contribute $22 monthly, she said. Lynch said that GSK employees have contributed toward health insurance premiums for more than 20 years, but the company decided to switch to a salary-based system to make the contributions more equitable. In addition, she said that the switch did not reduce health care costs for GSK (Goldstein, Philadelphia Inquirer, 11/10).
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