U.S. employers are anticipating health benefits costs will rise by an average of 5.6 per cent per employee in 2023, according to early results from a survey by Mercer.
The survey, which polled more than 850 U.S. employers, found if respondents made no changes to their benefits plans, the cost for the largest plans would rise by an average of seven per cent. The survey noted the current inflation rate sits at roughly nine per cent.
Only 36 per cent of respondents said they’re making cost-cutting changes in 2023, down from 47 per cent in 2021 and 40 per cent in 2022. Respondents said employees will be required to pick up an average of 22 per cent of total health plan premium costs in 2023 through paycheque deductions, unchanged from 2022 and 2021.
Read: Cost of U.S. employer benefits rising 5% in 2022, finds survey
Nearly three-quarters (74 per cent) said improving access to behavioural health care will be a priority over the next few years. When asked what benefits strategies were most important over the next three to five years, 84 per cent said enhancing benefits to improve attraction and retention was important or very important, followed by monitoring and managing high-cost claimants.
“Because health plans typically have multi-year contracts with health-care providers, we haven’t felt the full effect of price inflation in health plan cost increases yet,” said Sunit Patel, chief actuary for health and benefits at Mercer, in a press release. “Rather, it will be phased in over the next few years as contracts come up for renewal and providers negotiate higher reimbursement levels. Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures.”
Read: 74% of employers say cost is most important part of benefits plan design, review: survey