Survey finds employers planning a multitude of measures to deal with the increases
When it comes to health care costs, 71% of employers said they expect moderate to significant increases over the next three years, according to a survey from global advisory firm WTW. Employers expect costs to jump 6% next year compared to the 5% most are experiencing this year, with 54% expecting their health care costs this year to exceed their budgets.
Most (67%) employers plan to prioritize controlling rising health care benefit costs using a multitude of strategies, including implementing programs or switching vendors (52%) or shifting costs to employees (24%) through higher premium contributions.
“With no end in sight to projected cost increases, the need to manage health care costs and address employee affordability has never been greater,” said Courtney Stubblefield, Insights & Solutions leader, Health & Benefits, WTW, in a statement. “Yet, with so many potential actions, employers must focus on changes that go beyond addressing their employees’ needs to also support efforts to attract and retain talent during a tight labor market.
Here are the actions employers plan to take to manage costs, according to the survey.
“Employers that act now to predict, plan and implement solutions and strategies that balance employee affordability objectives with escalating prices can avoid having to take desperate measures in a rising health care cost environment,” said Tim Stawicki, chief actuary, Health & Benefits, WTW, in a statement. “Without question, employers face difficult challenges in the next few years. And with limited budgets, the challenge of making decisions that consider health care affordability and engagement is exponentially greater.”
A total of 455 U.S. employers with a combined 8.2 million workers participated in the WTW survey, which was conducted in August 2022.