As health care costs continue to significantly outpace the rate of inflation and increases in compensation, an affordability gap is placing increasing pressure on employees and eroding satisfaction with their health plans, according to a survey of employees conducted by Towers Watson, a global professional services company.

According to the survey, nearly three in four (72%) employees report that their employer has asked them to pay more for their health care benefits this year as employer health care costs for active employees are projected to rise 8.2% (after plan changes), to an average annual cost of $10,730 in 2011. More broadly, employee satisfaction and comfort with health care benefit plans is declining on several fronts:

- 64% are now satisfied with their health care plans, down from 69% in 2007.

- Only 45% are satisfied with the cost of their health care plan today, down from 53% in 2007.

- 26% believe health care spending has increased their stress levels.

“The growing health care affordability gap is a very real problem that employers must consider as they rethink their total rewards program and approach to health care subsidies,” said Ron Fontanetta, a senior health care consultant with Towers Watson. “The key to future success is a well-designed plan with creative and meaningful consumer and wellness incentives to slow cost inflation and improve employee health and productivity.”

Survey results highlight the difficulty in making this a reality: The percentage of employees who have not taken any action to reduce their health care costs has increased from 14% in 2007 and 2008 to 21% this year. Although close to three in five (57%) employees are taking better care of themselves, this number has dropped by 14% compared to last year. In addition, only 11% talk to doctors about more affordable treatment options, and 7% look for less expensive health care providers. In fact, the positioning of incentives is a key focal point of employer health care strategies in 2011.

Another sign that higher health care costs are weighing on employees is that many are becoming increasingly risk-averse, a possible side effect of recent economic uncertainty. For example, the number of employees who would pay more for predictable health care costs has doubled over the past year, to 42%. Nearly one-third of employees (30%) are even willing to get smaller compensation increases today if they could ensure lower, more predictable health care cost increases tomorrow.

“The health care affordability crisis has become much more than an issue of managing costs: It is driving the loss of productivity,” said Harlan Levine, a physician and senior health care consultant with Towers Watson. “Over time, the creation of Insurance Exchanges and new private coverage options spurred on by health care reform will create further challenges to employer efforts to engage employees as active consumers of health care services and participants in their own health management. As employers rethink their approach to health care, this may be the perfect opportunity to refine those strategies.”