What Does Employment Cost Index Mean?
The Employment Cost Index is an index that keeps track of inflation. It is calculated and maintained by the U.S. Department of Labor. It is common for employers to give employees insurance coverage as a benefit. The Department of Labor monitors the cost of these benefits on a quarterly basis.
Insuranceopedia Explains Employment Cost Index
The Employment Cost Index factors in things such as employee wages, benefits, and bonuses. It is common for employers to give their employees options for things like health insurance and life insurance plans. So, the Employment Cost Index does not monitor only one type of insurance cost, but many. If the cost of insurance policies increases sharply, then it can be a signal to the government that inflation is increasing too quickly. This can trigger a countermeasure from the government.