Employers are expecting only modest increases in 2015 in their group health care plan costs, but are looking at new approaches to continue to keep costs under control, according to a survey released Wednesday.
Employers surveyed last month by Towers Watson & Co. expect costs to increase in 2015 by an average of 5.2% prior to design changes and by 4% after design changes.
Those cost increases are comparable to a recent National Business Group on Health survey in which respondents projected costs to increase by average of 5% in 2015 after design changes.
Surveyed respondents, concerned both about keeping costs under control and a health care reform law provision — slated to go into effect in 2018 — that will impose a 40% federal excise tax on health care plan premium costs exceeding certain amounts, are considering a variety of cost control efforts.
For example, just over one-quarter of respondents are considering excluding coverage for employees' spouses or adding spousal premium surcharges if coverage is available elsewhere, such as through the spouse's employer.
In addition, 30% of employers say they are considering, for 2016 and 2017, a defined contribution approach in which they set a fixed amount of how much they would pay toward coverage, an approach that would give employees a financial incentive to choose lower-cost plans.
One approach employers are not considering: dropping coverage and directing employees to public exchanges, with or without an employer premium subsidy. Just over three-quarters of respondents said they were not confident public exchanges would provide a viable coverage alterative for their employees.
Employers taking such an approach also would face a big financial penalty: Under the Patient Protection and Affordable Care Act, they will be slapped with a penalty of $2,000 per full-time employee if they do not offer coverage to their full-time employees, starting next year.
The survey of 379 midsize and large employers, taken in July, also found that while just 17% now offer only account-based health plans — widely known as consumer driven health plans — as their sole plan option, 4% intend to do so next year, and 28% are considering it in 2016 or 2017.
Such arrangements, in which an account is linked to a high-deductible plan, have been growing in popularity because they cost substantially less than more traditional plan designs due to the high deductible.
It’s a safe bet health savings accounts are becoming a fixture in employer health benefits. Just take a look at the numbers.