The latest Mercer national employer survey covers 2,842 employers of various sizes and indicates that while per employee cost increases for health care coverage were mild in 2013, they are likely to grow more rapidly in the next few years. (Mercer survey) According to the survey, the average total health benefit cost per employee grew 2.1% in 2013 to $10,779, a significant decrease from 2012’s 4.1% increase. Employers, however, expect that next year’s increase will be 8%; although the employers anticipate making benefit changes, likely higher deductibles and copays, perhaps narrower networks, that will reduce that increase to 5.2%. Somewhat surprisingly, smaller employers with 10 to 499 employees had the smallest increase in 2013 of only about 1%, but this is likely the effect of greater use of high-deductible plans in this category of company, with the average in-network deductible rising to $1,663. One issue of concern for employers is that currently about 22% of employees waive coverage but with the mandate, more may take it, both for themselves and dependents, raising overall health spending for employers. Some employers are considering either not allowing enrollment of spouses who have their own coverage or imposing surcharges for them. Another tactic is to increase the premium contribution for dependent coverage. Nationally, enrollment in high-deductible plans rose from 16% of covered individuals to 18%, but some regions like the Midwest have much higher CDHP enrollment. The savings for employers are substantial, about 17% less cost than for a traditional PPO and 20% less than an HMO plan. About a third of employers are at risk for triggering the excise tax on rich-benefit plans in 2018 and that provides additional pressure to adopt high-deductible coverage. Most large employers continue to push wellness programs and 90% believe those programs are reducing medical trend. Over half now use financial incentives to encourage participation in these wellness efforts. Only a small number, about 6%, of large employers are considering terminating their benefit plan and sending employees to the exchanges, but about a third of small employers say they are looking at this option. Many employers say the requirement to provide coverage to those working thirty hours or more will affect their spending. All-in-all, the results indicate that health spending by employers is heading higher, but they intend to transfer much of the pain to employees.
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The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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