U.S. employers say they’re expecting their total health benefits plan costs to rise by an average of 5.4 per cent per employee in 2024, according to a new survey by Mercer.

The survey, which polled more than 1,900 employers, found the projected increase comes after more than a decade of annual cost increases typically averaging between three and four per cent and reflects changes that employers plan to make to hold down these costs.

However, respondents that said they don’t intend to make plan changes expected the cost for their largest medical plan would rise by an average of roughly six per cent. The survey noted the relatively small difference between the size of projected cost increases before and after plan changes indicated that most employers aren’t making cost-cutting changes to their plans, reflecting concerns about employee health-care affordability.

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During the past five years, many large employers (those with 500 or more employees) have avoided shifting costs to employees, as evidenced by minimal growth in deductibles and other cost-sharing requirements. Indeed, large employers said they expect employees will be required to pick up an average of 22 per cent of total health plan premium costs through paycheque deductions in 2024, unchanged from 2023 and 2022.

More than a quarter (28 per cent) of large employers said they offer health-care navigation or advocacy services to ensure plan members are pointed toward the best possible provider. Roughly half (49 per cent) said they offer one or more point solutions that provide enhanced services — often with a virtual health-care component — to members with chronic conditions such as diabetes.

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Two-fifths (42 per cent) of large employers said they’ve improved access to mental-health care within the past three years by adding supplemental behavioural health-care provider networks for virtual or in-person care. More than three-quarters (76 per cent) noted improving access to behavioural health care will be a priority over the next few years.

Large employers indicated monitoring and managing high-cost claimants will be an important or very important consideration over the next few years. Notably, more than two-thirds (68 per cent) said strategies to improve health-care affordability for employees will be important over the next few years.

“Considering the economic environment, projected health benefit cost increases could have been worse,” said Tracy Watts, Mercer’s national leader of U.S. health policy, in a press release. “One factor may be that as employers have moved away from cost-shifting to employees, they’ve been implementing cost-management strategies directed at the biggest drivers of cost — complex care and chronic medical conditions.”

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