Dive Brief:
- Amid rising healthcare costs, Amazon announced benefit updates Sept. 17 that include a “reduced-cost” healthcare plan for its fulfillment and transportation employees. Workers on the plan will only need to pay $5 a week and $5 for copays starting in 2026.
- Those costs amount to about $22 per month or $260 per year for employees. This results in reductions of weekly contributions by workers by 34% and copays for primary care, mental health and nonspecialist visits by 87%, Amazon said.
- The changes were made based on feedback offered by workers, Udit Madan, senior vice president of Amazon Worldwide Operations, said in the announcement.
Dive Insight:
Employers have faced “sobering” healthcare cost increases in recent years, Ellen Kelsay, president and CEO of the Business Group on Health, said in August. While employers projected 6.5% cost increases for 2024, actual increases measured out at 7.5%, BGH found in its recent report.
Mercer also flagged cost increases that could hit a 15-year high in a report this month.
Employers try to absorb as many of these increases as possible, Kelsay said, but employees may increasingly be on the hook to pay up. Three-fourths of employers surveyed by the National Alliance of Healthcare Purchaser Coalitions last year said that these costs could lead to trade offs with salary and wages increases.
In the benefits announcement, Amazon also flagged wage increases targeted toward rewarding tenure.
“Some of our most tenured employees will see an increase between $1.10 and $1.90 per hour, and full-time employees will, on average, see their pay increase by $1,600 per year,” Madan wrote in the announcement. “We also have an annual step plan where pay increases each year someone is with us, and as part of these changes we’re adjusting that plan so the increases are bigger each year than they’ve been in the past.”
