Health benefits costs back on the rise: Mercer survey

Following several consecutive years of decline, the average rate of increase in health benefit costs has begun to trend back upward, according to preliminary survey results published Thursday by Mercer L.L.C.

The average annual rate of increase in health benefit costs fell to 2.1% in 2013 from 6.9% in 2010.

However, early findings from Mercer’s 2014 National Survey of Employer-Sponsored Benefits indicate that average employer health benefit costs are likely to increase by between 3.9% and 5.9%, depending on the extent to which employers take steps to control cost growth within their employee populations.

“The average projected increase for 2015 may still be relatively low, but it does not come easily,” Tracy Watts, Mercer’s Washington-based senior partner and national health reform leader, said in a statement released on Thursday. “Employers have to work hard each year to keep cost increases manageable. And health reform is certainly creating new challenges.”

According to Mercer’s early survey results, 68% of employers plan to take some manner of action to control their company’s health benefit costs in 2015.

The early survey results indicate that adding a consumer-driven health plan or other high-deductible plan to their benefits program will play a significant role in employers’ cost containment strategies.

Approximately half of employers surveyed so far say they already offer a CDHP to their employees. That percentage is predicted to grow to 73% within the next three years, with 20% of employers saying they intend to fully replace their existing health benefit plans with a CDHP by 2018.

“The move toward high-deductible consumer-directed plans is spurring other changes as well, such as more voluntary options,” Ms. Watts said in the statement. “While some employees are comfortable with a lower level of coverage, offering supplemental insurance alongside a high-deductible plan gives employees access to more protection if they want it.”

Thus far, more than 1,700 employers have completed Mercer’s survey. The full results will be published later this year.