A new study indicates three quarters of US employers will increase employee contributions for health insurance in 2006 while a quarter will reduce pay increases as a result of higher health insurance premiums. The survey, a poll of 150 US employers by PriceWaterhouseCoopers, also noted that health insurance costs were up 12% this year, with respondents estimating costs next year would climb by 11%.

The study also indicates that health insurance, which accounted for 8% of payroll at large employers in 2000, now consumes between 12% and 15% of payroll. The fallout from these increases is significant, with 20% of employers likely hiring fewer new employees as a result of and 25% attributing reduced profits to increased health care expenses.