With health care costs rising for more than 90 percent of employers, a recent survey suggests that a defined contribution-type health care plan may be one of the best ways to keep the cost increases in check. Arthur Andersen, CalPERS and Total Health Advocacy Partners worked together to research and publish a study, The Productive Workforce Survey, of private and public employers to find out the key business issues affecting day-to-day operations. CalPERS, which represents state employees in California, is the largest public pension fund in the United States.

According to the survey, almost all public agencies (96 percent) and private employers (90 percent) reported that general health care costs have risen significantly during the past year. Seventy-four percent of public agencies and 53 percent of private employers claimed that the top reason why labor costs are increasing is that premiums for group health coverage are climbing.

The survey also found that a majority of private employers have used several strategies to address rising health care costs, while less than half of the public agencies have tried to address this issue. Most of the survey respondents that have tried different cost control strategies stated that the two most successful techniques to reduce costs have been to institute defined contribution programs and to pass along some of the higher premium costs directly to their employees.

Bill Leonard is senior writer for HR Magazine.