Employers predict that their annual health benefit costs per employee will rise by 3.9% on average in 2015 a full two percentage points lower than if they made no plan design changes, according to a new survey by Mercer.
These predictions for 2015 reflect the steps employers will take to contain medical costs. If they made no changes to their plans for 2015, they predict their benefit costs per employee would rise by 5.9% on average. Even so, 32% of companies are renewing their health plans without making any changes, the Mercer survey found.
Benefit brokers can make their services more valuable to clients by using this benchmarking information to help predict health care costs and offer advice on what strategies could reduce medical spending.
The average projected increase for 2015 may still be relatively low, but it does not come easily, says Tracy Watts, Mercers national health reform leader. Employers have to work hard each year to keep cost increases manageable. And health reform is certainly creating new challenges.
Design changes
Many employers are introducing high-deductible health plans as a way to rein in health care spending. Consumer-directed health plans (high-deductible plans with a health savings account) cost, on average, 20% less than traditional health plans, according to Mercer. About half of large employers offer a CDHP today, and 73% intend to have a CDHP in place within three years. In fact, 20% of large employers say it will be the only choice available to their employees. Just 6% of large employers offer a full-replacement CDHP today, the survey showed.
The move toward high-deductible consumer-directed plans is spurring other changes as well, such as more voluntary options, says Watts. While some employees are comfortable with a lower level of coverage, offering supplemental insurance alongside a high-deductible plan gives employees access to more protection if they want it.
Brian Marcotte, president of the National Business Group on Health, confirms, Many employers are, in fact, taking necessary steps to rein in costs. This includes partnering with workers to engage in health care decisions and educating them to be better health care consumers, as well as sharing more costs with workers and narrowing their benefit options.
Under the Affordable Care Act, employers must offer adequate health insurance to all of their employees who work 30 hours per week, or pay a tax penalty, starting next year. Some industry observers predicted that employers will cut staff or reduce peoples work hours so they dont qualify for the benefits, but the survey does not show evidence of that happening. Nonetheless, 31% of employers said they plan to schedule new hires to work less than 30 hours per week.
These figures represent about 1,700 early responses from a survey project that it still ongoing.
