Thursday, September 5, 2013

Large Employers Should Expect a 7% Increase in Healthcare Costs in 2014: Survey

Large employers expect their cost of health care benefits to rise 7 percent in 2014, according to annual survey conducted by the National Business Group on Health, a nonprofit whose members include 66 Fortune 100 companies.

The anticipated uptick would mark the second straight year that costs have climbed that quickly, according to projections. A final calculation for 2013 won’t be available until after the year ends.

“Rising health care costs remain a serious concern of U.S. employers, especially in light of the slow-growing economy, the very low growth in wages and fears about forces that threaten to drive up costs even higher,” Helen Darling, the group’s president and chief executive, said at a press conference.

The organization asked large employers what they considered to be the most effective tactic for controlling health care costs. 

  • The biggest share, 36 percent, said their best option was implementing a consumer-directed health plan, [such as an HSA] one that typically uses personal health care spending accounts to cover routine expenses and relies on a high-deductible coverage for more costly care. ...
  • The number of organizations that are poised to offer consumer-directed plans as the only option for employees ticked up to 22 percent from 19 percent the previous year.
  • The number of large organizations offering a consumer-directed plan as one of multiple options remained flat at 72 percent. ...

Only 12 percent said they expect current full-time employees to choose [ACA Exchange] coverage instead of the coverage provided by their employer. ...

The NGBH is an organization that aims to represent large employers’ perspectives on health policy topics. Its report was based on survey responses from 108 of its member organizations. The survey was conducted in June, meaning that it was gathered before federal officials announced that enforcement of the Affordable Care Act’s employer mandate would be delayed until 2015. ...