Get ready for another rise in per-employee costs for employer-sponsored health insurance.
It’s predicted that after a 6.3% rise in 2021, 2022 will experience an increase of 4.4%, according to Mercer’s 2021 National Survey of Employer-Sponsored Health Plans.
For the most part, the reason for the continued climb is people are still catching up on all the healthcare procedures and check ups they put off in 2020. Plus, the healthcare industry is still dealing with the new strains of COVID-19 and the lingering effects of some of the COVID-19 symptoms known as long COVID-19.
Costs not being passed along
However, it appears these upticks in cost aren’t being passed on to employees like they have been in the past. Employers aren’t doing this because of the “great resignation” and the need to retain and attract employees in this highly competitive market.
In fact, the study found many employers are reducing costs. For example, in 2021, the median deductible for a PPO individual coverage went from $1,000 to $900 among small employers (50-499 employees). For larger employers, the median individual deductible in an HAS-eligible plan went from $2,000 to $1,850 in 2021.
And 60% of plan sponsors said, despite their cost increases, they won’t alter their benefits plan to help cut costs in 2022. If anything, they plan to enhance benefits offerings, especially in the realm of mental health, to support employees and to stay competitive.
Quality, delivery & personalization
“The tough challenge of solving for both healthcare cost and healthcare affordability means maximizing value and accepting the disruption it may bring,” said Tracy Watts, National Leader for U.S. Health Policy at Mercer. “Three key components of value are quality, delivery and personalization.”
Quality: While you want to pursue quality initiatives steering employees to high-performing providers, how you do that has changed. Employees have gotten a taste of healthcare convenience and don’t want to give that up. So while quality providers are important so is convenient access.
Delivery: Continuing to offer virtual health care is a must. It’s a great way to increase care access without raising costs. Plus, it’s here to stay. However, providing access to virtual care includes many other digital health solutions that don’t require live one-on-one interaction with a healthcare provider. Currently 25% of large employers now offer digital health solutions that target specific health conditions and another 20% are entertaining the idea of adding them. Digital health solutions help keep costs down by replacing in-home care for online physical therapy for example.
Personalization: Digital health solutions also offer a cost-effective way for employers to provide employees with a variety of benefits they can pick and choose from.
“In today’s environment of varied working situations, employers see this type of personalization as a way to ‘even out’ the benefits available across onsite, remote, and hybrid workers,” said Watts.