Now this is what you can call inflation.

US employers are likely to shell out 8.5 percent more on healthcare costs in 2012 on top of an increase of 8 percent this year, according to an annual report on medical cost trends published by PwC's Health Research Institute.

Most CFOs of large companies believe health care reform will raise costs and reduce quality.

According to a new survey, more than 90 percent expect benefits cost per employee to rise. What's more, half of the respondents expect the quality and/or breadth of offered benefits to decline.

Despite threats from incoming Republicans to overturn President Obama's healthcare reform, a majority of companies are seemingly embracing the changes. However, they clearly are concerned about the associated costs.

More than half (53 percent) of all employers--and 67 percent of large employers--say they do not plan to drop health benefits, according to a recent national employer survey conducted by the Midwest Business Group on Health (MBGH) and co-sponsored by the National Business Coalition on Health, (NBCH), Business Insurance and Workforce Management.

Employers are heading into "open enrollment" season when companies decide what kinds of health plans to offer to offer employees. More companies are including health plans with higher deductibles.

Though these plans have been around for nearly a decade, many employers and employees alike have little understanding of them and their impact on costs, a new analysis from the Employee Benefits Research Institute shows.

If you live or work in New York City you know how the subway can be both a blessing (when it runs on time) and a curse (when it doesn't) or for reasons that on Wednesday became clear: fare hikes.

If you don't live in New York you can appreciate why the agency responsible for public transit, the Metropolitan Transportation Authority, is having such a difficult time making ends meet. At the top of the list is compensation and benefits costs, which account for two-thirds of the MTA's $12 billion operating budget for 2011.

The MTA says its health care costs are going up about 9 percent annually-which is actually in line with national increases. The challenge for a public agency of course is that it is locked into
contracts with its heavily unionized workforce. Making changes is not easy.

The plan the MTA put forward Wednesday was to enter in what it called "net zero" contracts with its unions-contracts in which any raise would be "paid" for by givebacks in productivity, changes in work rules or increased contributions to health care benefits. The unions took exception to this proposal but no one doubts that the compensation structure of government employees needs to come in-line with their private sector counterparts. Andrew Cuomo, the Democratic nominee for governor, has made reforming this imbalance part of his
platform.

Debt service aside (and the MTA's debt service totals $1.8 billion this year, growing to $2.5 billion by 2014), the MTA, like so many government entities throughout the country, has long term health care challenges ahead. Its health care retirement obligation totals $1.4 billion growing to $1.7 billion by 2014. While the MTA continues to pay enough into its retiree health care fund to pay for its current retirees' health care, the authority, citing this year's cash-flow problems, will not pay $57 million this year into a fund for future obligations.

The Great Recession has helped bring the issue of government post-retirement obligations to light. As government revenues shrink and obligations grow, taxpayers sense an inherent injustice between their own grim retirement prospects and the assurances given to public sector workers. Subway service cuts and fare hikes are only meaningful if they address the long-term problems rather than enable government to deal with short term crisis.

Cuomo is banking on this public displeasure, as is the MTA. Next year the MTA's contract with its largest union is up for renewal. The transit authority will be able to test whether it has public support for changing the way the state entity does business with unions. Bringing government into the 21^st century by reducing health care and other post-retirement obligations will be good for taxpayers and for businesses, including those with heavily unionized workforces.

According to the federal government, Americans work about eight hours a day. Now, I say "according to..." because the government actually put out a study last month confirming what we already know: we spend a third of our lives at work.

The workplace is our second home. Our employer is our second family. That is why the safety net employers provide for employees matters.

Tired of dealing with higher health care costs, employers are shifting their strategies toward making their employees healthier. One tool in their arsenal is the onsite wellness clinic.

As I reported earlier, the Midwest Business Group on Health in a survey estimated that 60 percent of employers plan to expand or start a program. Wellness has slowly been catching on with employers who want to create a healthy workplace culture and who understand that costs from lifestyle-related chronic illnesses are eating up health care dollars and costing the economy $1 trillion a year.

A critical appeals court ruling on Tuesday could have a widespread impact on bankrupt companies that try to dump their commitment to provide retiree health care benefits as part of their reorganization plan.

On June 25, the US Bankruptcy Court for the District of Delaware approved the adequacy of the disclosure statement in connection with Visteon's reorganization plan, which included plans to cut health care benefits to 2,100 retirees, according to Dow Jones.

The Supreme Court this week rejected a challenge by employers to San Francisco's universal healthcare program. The justices denied an appeal from the Golden Gate Restaurant Association of a lower court ruling that upheld the program's requirement that employers help pay the bill or give their workers health coverage.

 As employers begin to evaluate their health benefits in anticipation of open enrollment, a new report by PricewaterhouseCoopers estimates that medical costs will rise 9 percent next year. It sounds like a lot--and it is.