Benefits

Large Employers Expect Group Health Care Plan Costs to Rise 7% in 2013

By Jerry Geisel

Aug. 6, 2012

Large employers estimate that the cost of their group health care plans will rise an average of 7 percent in 2013, the same percentage hike that they expect this year, according to a survey released Aug. 6.

“Rising health care costs continue to plague employers at an alarming rate,” said Helen Darling, president and CEO of the National Business Group on Health. The NBGH survey is based on the responses of 82 members of the Washington-based organization.

Amid rising costs, employers say adopting consumer-driven health plans is the most effective step they have or plan to take to combat rising costs.

Forty-three percent of respondents said CDHPs are their most effective strategy to control costs, compared with 19 percent who said wellness initiatives are the most effective tactic, and 9 percent who said increased employee cost-sharing was the most effective strategy.

Under a CDHP, employees face very high deductibles for many medical services. CDHPs are linked to either health reimbursement arrangements, which employers fund and employees can use to pay for costs that fall under their deductibles; or health savings accounts, to which employees and/or employers can contribute.

Among respondents that say they will offer a CDHP in 2013, 79 percent say they will offer a CDHP linked to an HSA in 2013, up from 75 percent in 2012, while 29 percent will offer a CDHP linked to an HRA, up from 16 percent in 2012.

Other findings

Other survey findings include:

• Almost all—94 percent—of residents said they will have to reduce the maximum amount of money employees will be able to contribute to their health care flexible spending accounts to comply with a health care reform law requirements imposing a $2,500 FSA contribution limit, effective next year. The remaining 6 percent of respondents either don’t offer an FSA or already set a limit at or below $2,500.

Employees with the highest out-of-pocket costs will be hit the hardest by the new FSA contribution limit, Ms. Darling said.

• Sixty percent of employers said they will boost the percentage of the health care plan premium employees pay, while 40 percent say they will boost in-network deductibles, and 33 percent say they will increase out-of-network deductibles.

• Among employers making contributions to employees’ HRAs and HSAs, the median HRA contribution is $550 and the median contribution to employees’ HSAs is $500.

• Among employers that give employees financial incentives for participating in wellness programs, the maximum total amount an employee could earn this year is $300, while the maximum amount a dependent could earn is $250.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management.

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