Survey findings from Mercer last month reveal employers have had to reduce their budgets more than usual for 2010. The survey of more than 1,500 employer health plan sponsors found average health benefit cost per employee rose 6.3 percent in 2008. However, cost increases have been "remarkably stable" since 2005, averaging just above 6 percent each year.
Still, "The economy clearly had an impact on rising health care costs," says Linda Havlin, worldwide partner at Mercer. "Among the reasons for rising cost are stress-related illness and layoffs. Actual or feared loss of employer-subsidized coverage makes people think about filling their medications, getting their preventive care and taking care of any elective procedures that they have postponed."
Mercer says employers' first line of defense against rate increases is shifting cost to employees. But this is challenging for employers that feel their employee cost sharing requirements are already high. For example, between 2004 and 2008, according to the consulting firm, the median family deductible for in-network services in a PPO ? the type of plan offered by the most employers ? rose from $1,000 to $1,850. In 2010, nearly two-thirds of all respondents (63 percent) will again ask employees to pay a greater share of health plan costs, most commonly by requiring them to pay a higher portion of the monthly premium (40 percent of respondents) and/or by raising deductibles, copays/coinsurance or out-of-pocket maximums (39 percent).
Nearly a fifth of respondents are eliminating high-cost or more generous health plan options as a way to move employees into lower-cost options, such as consumer-directed health plans.
"We're expecting to see a real spike in 2010 in both the number of employers offering CDHPs and in the number of employees enrolling in them, as more employers become comfortable with the concept of offering a high-deductible, account-based plan as one choice or their only choice," says Havlin.
