A new study shows that 71% of US employers expect moderate to significant increases in healthcare costs over the next three years, including a 6% rise in 2023. While the need to manage costs is clear, it’s shocking that 1-in-4 employers plans to shift costs to employees through higher contributions.
As quoted in the WTW study, “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.”
Increasing premium contributions effectively reduces employee income and quality of life, and is contrary to a growing focus on making employee benefits more affordable. It’s certainly not the best way to win the war for talent and boost employee satisfaction and retention.
In addition to higher payroll deductions, 23% of employers surveyed have further eroded employee earnings and freedom of choice by increasing out-of-pocket costs for non-preferred labs, providers, and facilities. Another 19% expect to do so by 2024. Boxing employees into narrow networks is never popular and does little to effectively balance cost management with health care affordability.
Doing the Right Thing for Employees
Employers have a fiduciary responsibility under ERISA to manage plan expenses on behalf of plan participants. At the same time, they need to seek competitive advantages and avoid future risk. A next-generation health plan is a strategic tool for meeting these goals by countering inflationary pressures and making health care affordable without reducing benefits.
While 27% of respondents currently use programs to combat fraud and waste, such capabilities can be fully integrated into a modern health plan to ensure sustainable savings and help prevent such abuse from happening in the first place.
The same is true for concierge support services, which help employees navigate the healthcare system and get more value from their health plan. A key driver of employee satisfaction, this essential service is currently only offered by 21% of respondents, with another 25% expecting to do so by 2024.
Employers willing to let go of their “devil you know” mindset can deliver better, more affordable health care for their employees and successfully fight the rising costs and low transparency of legacy health plans.