Health Insurance Headaches
THE GOOD NEWS is, United States printing shipments grew at a robust pace over the first quarter of the year, up 4.2 percent ahead of last year’s first quarter, and total U.S. printing industry production could reach more than $170 billion for 2006, reported Ronnie H. Davis, Ph.D., vice president and chief economist for the Printing Industries of America/Graphic Arts Technical Foundation (PIA/GATF), Sewickley, Pa. Printers’ prices were also up an average of 2.2 percent from year-ago levels—the highest rate since before the 2001 to 2002 recession—indicating a strong print market is providing printers some pricing leverage.
The bad news is, operating costs such as energy/utilities, employee health insurance and paper are escalating, up by 7.8 percent compared to last year. “The need to focus on cost-control and productivity gains is as strong as ever,” Davis observed. “Just for health insurance alone, costs are up 9.2 percent over the past 12 months, and wages and salaries are also rising fairly significantly at 4.3 percent. About 2 percent to 3 percent of total sales now go to pay for employee health-care cost, so it is a significant cost issue for printers,” he continued. “I believe that health-care costs will continue to increase at a faster pace than overall costs, and it will remain a problem for both firms and employees, as more and more of the costs will be off-loaded to employees.”
In addition to printing industry research, surveys conducted by various organizations further indicate the cost factor for keeping employees healthy is making business owners sick. Understanding the ill effects a less-than-attractive benefits package can have on recruitment efforts also keeps them up at night.
Headquartered in Nashville, Tenn., The National Federation of Independent Business (NFIB) reported two-thirds of its members cited health-care costs as a critical problem, and believe workers' health benefits are issues when competiting with large companies for top candidates. "Employee health insurance was the greatest concern, with workers compensation and product or professional liability ranking second and third respectivley," said President Todd Stottlemyer.