US employers expect health insurance costs per employee to rise by an average of 5.6% in 2023. While significantly higher than the projected 4.4% increase in premiums for 2022, the increase in 2023 lags overall inflation, currently hovering at around 8.5%. over a year.
Cost increase projections are based on the first 864 employers with 50 or more employees who responded to the National Survey of Employer-Sponsored Health Plans conducted by HR consultancy Mercer through August 4. I’m here. The investigation, which he launched on June 22nd, is still open to the public, with a final report expected this fall.
“Health plans typically have multi-year contracts with providers, so the impact of rising premiums has not yet been fully felt,” said Sunit Patel, chief health insurance actuary at Mercer. Hmm.
The impact of health care price increases on planning costs “will be phased in over the next few years as contract renewals loom and providers negotiate higher reimbursement levels,” he said. Employers have a small window to escape before the sharp rise scheduled for 2024 due to the cumulative effects of current inflationary pressures.”
Patel said most self-insured employers now have a good idea of their premiums for 2023, but many smaller, fully insured employers I am warning you that you have not yet received your renewal fee from your health insurance. “These could be higher as insurers hedge their bets in today’s volatile healthcare market,” he added.
The expected 5.6% increase reflects changes employers are planning to keep costs down. Without any changes, respondents indicated that the cost of their largest health plan would increase by an average of 7%.
focus on affordability
Despite rising costs, most employers are not planning to increase employee contributions in 2023, including by increasing deductibles and copayments.
Among the large employers (companies with 500 or more employees) that responded to the survey, employees will continue to pay average health insurance premiums through payroll deductions in 2023, unchanged from 2022 and 2021. 22% must be borne.
A survey conducted by Mercer earlier this year found that 11% of large companies will offer free coverage to employees on at least one health plan in 2023, and another 11% are still considering it. rice field.
“Healthcare affordability is a real issue for many employees, especially as inflation puts a strain on household budgets,” said Tracy Watts, U.S. Health Policy Leader at Mercer. wants to do what it can to keep employees paying more and remove cost barriers when care is needed.
“In today’s environment of record inflation and widespread labor shortages, employers face a very difficult balancing act,” Watts added. Rising health care costs must be managed while making smart decisions about how to attract and retain them.For now, the majority of employers are prioritizing attractive benefits.”
cost containment strategy
In June, insurance broker and consultancy NFP reported that soaring health care costs were causing employers to rethink plan design and offerings.
of NFPs
2022 U.S. Benefits Trends Reportis based on a February and March survey of 563 HR benefits decision makers, showing that two-thirds of employers want innovative cost-containment solutions . Nearly three-quarters of employers consider each of the following to be an important factor when considering cost containment.
- Increased employee access to quality providers (83%).
- Increase cost transparency (79%).
- Reduction in out-of-pocket drug costs (79%).
“Today, employers recognize that ‘total cost transparency’ and holding providers accountable is also essential,” said Heidi Cottle, NFP’s head of cost containment strategies. says. According to her, next-generation planning designs will add incentives to encourage employees to choose in-network providers that offer high-quality, cost-competitive services.
According to the survey, more than one in three employers (36%) cite “cost containment” as a key factor in offering alternatives to healthcare delivery, such as telemedicine. Half of the respondents had deployed virtual solutions in mental health (55%) and primary care (54%) in the last 18-24 months. About a third had implemented virtual solutions for emergency care (37%) and emergency care (31%).
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SHRM OnlineAugust 2022
