Prepayment review: A proactive way to control health benefit costs in recessionary times

Expense control has become a priority for many businesses. Recent layoffs at tech firms such as Meta (formerly Facebook) and Peloton could portend more cutbacks to come.

Even profitable employers are not immune from these financial pressures. Some firms have begun laying off employees and restricting expenditures on big-ticket costs such as travel. However, there is a more holistic view toward cost reduction that can reap significant savings.

One area ripe for examination is the cost of health insurance – a budget line item that often runs tens of millions of dollars a year for larger employers. Employers’ health insurance costs rose 3.2% in 2022, according to the latest data from national employee benefits firm Mercer. The companies surveyed for that study expect insurance costs to rise by more than 5% in 2023. The benefits firm WTW (Willis Tower Watson) has made an even graver prediction, projecting that medical insurance costs will rise by more than 10% globally after increasing nearly 9% in 2022.