The majority of employers are planning to make “moderate to significant changes” in their health plan design and strategies over the next few years in an effort to hold down ever-increasing costs.

Nearly four in five employers (78%) say big plan changes are on the horizon, according to a Willis Towers Watson survey of 467 midsize to large employers, out this week. And they say the changes will pay off in the form of holding down cost increases, with employers expecting a modest 4% increase for the second consecutive year.

According to consulting firm Mercer, 2015 costs increased by an average of 3.8%.

“Even in a low-cost trend environment, [healthcare costs] is still something very much on employers’ minds,” says Trevis Parson, senior consultant at Willis Towers Watson. “They are trying to employ different techniques through a variety of methods in controlling these costs. And a lot of these methods will help employees.”

Though the healthcare cost increase predicted is the lowest in 15 years, it’s still more than twice the current Consumer Price Index, the consulting firm’s report notes.

Much of employers’ planned design changes will focus on creating — and maintaining — a healthier population of employees.

“You look at rising conditions, like diabetes and obesity, and you see employers have a big challenge ahead of them,” Parson says. “If you could move some of these folks from less healthy to healthy, you can run down a big hill. If you look at some data, you’ve got 80% of the people driving 20% of the cost, and 20% of the people driving 80% of the cost. If you can get someone out of that 20% range, you can save a fair amount of money.”

Among the strategies employers are eyeing, according to the survey:

Telemedicine. Electronic physician visits are becoming increasingly popular, and will be even more so in the next couple of years. Today, 67% of employers offer such visits, but by 2018 the number could increase to 90%, Willis Towers Watson notes.

Centers of excellence. Medical providers that specialize in particular clinical services are “growing dramatically” in use: 31% of employers are using them today; by 2018 the number could grow to 73%.

High-performance provider networks. Networks of providers that partner with employers and health plans to offer lower premiums and better value offered alongside broad networks are becoming more popular: 13% offer the option today; by 2018 the number could rise to 56%.

Onsite or near-site health centers. Employer-owned or sponsored workplace health centers remain appealing: 22% of employers have one or more today; by 2018 the number could grow to 40%.

Technology to improve employee engagement. Decision support tools and other engagement technologies are growing in popularity, the report says. For example, 52% of employers use technology to enable employees to make better plan selections now and another 37% could follow in their footsteps by 2018.

“In spite of the fact that the tax has been delayed 24 months, [employers] aren’t sitting on their [hands]."

The Willis Tower Watson findings mirror results of Wells Fargo’s annual Employee Benefits Trend Study from last month, which also predicted big benefits changes for employees in 2016. That study found that employers are modifying benefits packages by cost-shifting, increasing their focus on wellness and enhancing voluntary benefit offerings.

Additionally, the survey found, employers are largely unaffected by the delay of the Affordable Care Act’s Cadillac tax.

More than two-thirds of employers (70%) said the tax’s two-year delay will have a “small or negligible” impact on their health care strategies for 2017.

“In spite of the fact that the tax has been delayed 24 months, [employers] aren’t sitting on their [hands],” Parson says. “There is more immediate pressure about the cost gap between health care cost trend and inflation; it’s still driving things. They are trying to make changes to their plans and trying to find effective solutions in advance of the tax and they are still trying to do so after [implementation].”

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access