Health benefit cost slows again, but watch out for ACA in 2014
Employers across the nation took action this year to control their health care expenses, and successfully, too: health benefit cost slowed again in 2013. After 6.1% cost expansion in 2011 and 4.1% in 2012, per-employee numbers grew by only 2.1% this year, according to data released Wednesday by Mercer, but employers expect the trend to reverse next year.
In a survey of 2,842 organizations with 10 or more employees, the average per-worker total of employer and employee contributions to medical, dental and other health coverage was $10,779.
Among those with workforces of between 10 and 499, Mercer says, costs only rose by about 1%, while the largest employers those with 5,000 or more saw a bump of 3.7%. Large employers spent their efforts supporting low-cost consumer-driven health plans, as well as bettering wellness and health management. Small employers shifted cost with higher deductibles, according to the survey; the average PPO in-network deductible jumped 15% to reach $1,663 in 2013.
The good news is that employers have already taken decisive action to slow cost growth so they will be in a better position to handle the challenges ahead, says Julio A. Portalatin, president and CEO of Mercer. But the impact of the Affordable Care Act on enrollment levels remains a huge question mark.
Indeed the extent of ACAs impact is difficult to predict, though employers anticipate health costs will grow by 5.2% in 2014. Currently 22% of eligible employees waive employer coverage, and 47% of those who do enroll forego dependent coverage. Some experts predict Obamacares penalties and regulations could bring both of those numbers down.
There are a lot of unknowns when it comes to enrollment, says Tracy Watts, Mercers national leader for health reform. A big question is how many employees will enroll for the first time, given that the tax penalty for not obtaining coverage is relatively small. But an employer might wind up covering more dependents if others in the area have made changes to discourage their employees from enrolling dependents.
Watts added: Cost increases from higher enrollment would be on top of the normal increase in the per-employee cost of coverage.
Read Mondays inBrief for more on Mercers survey and employers efforts and expectations regarding health benefit cost.