Health Care and How Organizations Plan to Adjust to Increased Health Care Cost

1. Health Care and How Organizations Plan to Adjust to Increased Health Care Cost • Sample comprised of 377 randomly selected HR professionals. • Analyzing 377 responses of 2872 emails sent, 2643 emails were received (response rate = 14%). • Survey fielded September 26 – October 2, 2006; presentation generated on October 4, 2006. • Margin of error is +/- 5%.

2. Adjustments Organizations Are Likely to Make Over the Next 12 Months to Cover the Cost of Employee Health Care Coverage Note: Averages are based on a scale where 1 = Very Unlikely and 5 = Very Likely.

3. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Changes in hiring decisions based on employee demographics (e.g. age, gender, health, etc.) Note: Average = 1.91 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

4. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Decreases in employee salaries/raises Note: Average = 2.12 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

5. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Decreases in employee training/professional development Note: Average = 2.21 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

6. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Decreases in hiring of new staff Note: Average = 2.26 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

7. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Decreases in other employee benefits (e.g. retirement benefits, retiree health care coverage, pension, etc.) Note: Average = 2.42 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

8. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Decreases in paid leave Note: Average = 1.83 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

9. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Decreases in technology investments Note: Average = 2.10 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

10. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Increases in downsizing/layoffs Note: Average = 2.05 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

11. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Increases in expectations of employee productivity Note: Average = 3.04 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

12. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Increases in exploring the use of offshoring/outsourcing Note: Average = 2.09 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

13. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage? Increases in the costs of consumer services/products Note: Average = 2.63 based on a scale where 1 = Very Unlikely and 5 = Very Likely.

14. Over the next twelve months, how likely is it that your organization will have to make adjustments in the following areas to cover the cost of employee health care coverage?

15. Are there other adjustments your organization is likely to make to cover the costs of employee health care coverage?

16. Are there other adjustments your organization is likely to make to cover the costs of employee health care coverage?

17. Other Adjustments Organizations Are Likely to Make Over the Next 12 Months to Cover the Cost of Employee Health Care Coverage • Increases in employee co-pay • Increases in employee premium • Introducing wellness program • Offering cash incentives for employees to opt out of organization’s health care plan