Actions taken by U.S. employers in 2012 to better manage their health plans led to the country’s lowest average annual cost increase since 1997, according to results from a recent Mercer study.
The National Survey of Employer-sponsored Health Plans reveals that growth in the average total benefits cost per employee slowed from 6.1% in 2011 to just 4.1% in 2012; the average per-employee cost was $10,558. Employers with more than 500 employees experienced a higher per-employee increase in 2012, at 5.4%.
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Those polled expect another relatively low cost increase in 2013, at just 5%. The slowdown can be attributed to plan changes being made, including moving more employees into low-cost consumer-directed health plans and beefing up health management programs. Most employers (78%) think support for wellness is having an effect on cost increases.
“Employers are very aware that, in 2014, when the health reform law’s provisions kick in, they will be asked to cover more employees and face added cost pressure,” said Julio Portalatin, president and CEO of Mercer. “They’ve taken bold steps to soften the impact, and it’s paying off already.”
Those employers that might have been waiting for this year’s election results before embarking on any plan changes will now need to act quickly, adds Portalatin, “because critical decisions need to be made by the summer so they can be implemented for 2014 open enrollment.”
Few respondents said they were likely to terminate their employee health plans within the next five years—just 7% of large employers and 22% of small employers said it was likely or very likely—even though state-based health insurance exchanges will provide another source of coverage for individuals beginning in 2014. In fact, the percentage of employers offering coverage in 2012 rose slightly, to 59% from 55% in 2011.