Increasing Health Care Costs Crowding out Retirement Benefits

A new study by a major benefits consulting firm has found that the costs of providing employee benefits has grown by 24% since 2001. But while health care costs for active employees have more than doubled, retirement benefit costs (including pensions, 401(k)s and retiree medical plans) have actually decreased as a percent of wages during that time.

  2001 % of Wages 2015 % of Wages % Increase
Active Health Care 5.7% 11.5% 102%
Retirement 9.1% 6.8% -25%
HC & Retirement 14.8% 18.3% 24%


While retiree benefits made up almost 60% of benefit costs in 2001, by 2015 it made up just 36% with health care costs making up the difference.


Take-Aways for Union Negotiators

Controlling health care costs is a priority for our members as well as our employers. Even as we fight to protect our comprehensive health plans, rising costs erode our wages and other benefits. We can begin working together with our employers to explore new ways to control costs that don’t just shift the burden of affording care from the employer to our members.


Shifts in benefit allocations among U.S. employers (Willis Towers Watson, July 14, 2017)

Employers’ cost to provide benefits have increased 24 percent since 2001 (The Washington Post, July 20, 2017)

Employer Survey Finds Alternative Approaches to Reducing Health Care Costs (CWA Health Care & Retirement Security Blog, July 6, 2017)