New research points to low-cost consumer-directed plans as being a key strategy in thwarting rising health benefit costs, according to current Mercer data.
Early responses from an ongoing Mercer survey show employers predicting an increase of 3.9% in health care costs in 2015. Cost growth reached a 15-year low last year, at 2.1%, and the 2015 prediction is due to employers making expected changes to their health plans next year. If no changes are made, costs were expected to reach as high as 5.9%.
The average projected increase for 2015 may still be relatively low, but it does not come easily, says Tracy Watts, senior partner at Mercer. Employers have to work hard each year to keep cost increases manageable. And health reform is certainly creating new challenges.
One strategy employers are using to soften the increase in health spending in 2015 is adding a low-cost, high-deductible health plan for the newly eligible employees or for all employees.
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Employers should note, according to the report, that consumer-directed health plans eligible for a health savings account are generally 20% less than traditional health plans. Due to health care reform, Mercer points to an accelerated trend in CDHP use. While half of those surveyed say they currently offer CDHP today, that number will spike to 73% in 2015 as more employers say they will have a CDHP in place within three years.
Further, 20% say this will be the only choice offered. Currently, only 6% of employers say they have moved to a full replacement CDHP, the study notes.
The move toward high-deductible consumer-directed plans is spurring other changes as well, such as more voluntary options, Watts adds. While some employees are comfortable with a lower level of coverage, offering supplemental insurance alongside a high-deductible plan gives employees access to more protection if they want it.
Other costs employers are expecting include the new requirements that all employees working 30 hours or more will be required to have coverage. Roughly 22% of employers are expecting to see costs grow next year, as a result.
Thirty-nine percent of large retail and hospitality businesses, which typically employ many part-time workers, are expected to extend coverage in 2015.
The math is simple the more employees you cover, the more you spend, says Beth Umland, Mercers director of research for health and benefits. But this additional spending isnt accounted for when we talk about the low growth in the cost of coverage.
