Employers Face Tough Choices As Health Costs Rise Still Faster; Strategies, Costs Shift.(A)

Byline: GLORIA LAU

It's no fun to be either the boss or the worker these days.

With double-digit premium hikes expected for the fourth year in a row, employers will be paying more for health insurance. And they'll pass some of the cost on to workers, who already have seen pay increases slow this year.

"It's a double hit for employees," said James Foreman, managing director of global health and welfare at consulting firm Towers Perrin. Workers are being asked to pay bigger monthly premiums plus bigger co-payments and deductibles.

September is when most midsize U.S. companies will sign contracts for 2003 health care coverage. The exercise starts earlier, typically March to July, at firms with more than 5,000 workers.

Data aren't out on how large employers fared in negotiations. But California's retirement plan set off shock waves when it reported its premiums will rocket 19% to 25%.

Most experts see premium rises topping those for 2002, which averaged 14% for big employers. Small employers will see worse.