Tags: employer-sponsored | healthcare | wellness | costs

Survey: Employer-sponsored Healthcare Costs to Rise 7%

By Nancy Stanley   |   Tuesday, 07 Aug 2012 07:53 AM

Most large employers expect costs of employer-provided healthcare to increase 7 percent in 2013, resulting in a majority implementing cost-control measures to reduce costs, a new survey reveals.

The National Business Group on Health, a nonprofit association of 342 large employers, conducted the survey in June, prior to the Supreme Court ruling upholding Obamacare. The survey includes responses from 82 large employers.

The expected 7 percent increase in costs is the same that was projected for this year, but smaller than those experienced in the previous three years.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

To cope with the rising costs, many employers expect to implement a variety of cost-control measures.

Specifically, 60 percent of the employers surveyed expect to increase the percentage of the premium that is paid by the employee, with the majority expecting the increase to be less than 5 percent. In addition, 40 percent expect to increase in-network deductibles, while 33 percent intend to increase out-of-network deductibles and 32 percent plan to increase out-of pocket maximums.

Moreover, 43 percent believe consumer-directed health plans, which provide a variety of mechanisms that heighten consumer awareness of the cost and utilization of healthcare services through plan design incentives, are the most effective cost-control measure, followed by wellness programs (19 percent). Only 9 percent say that increasing employee cost sharing is the most effective measure.

Financial incentives are used by nearly half of the respondents to encourage participation in wellness programs. Specifically, 44 percent provide incentives based on tobacco-use status, while 39 percent base incentives on the achievement of health outcomes, such as body mass index or cholesterol levels.

The median amount of financial incentives is expected to increase 50 percent, from $300 this year to $450 next year.

The survey also found that employers are still making changes to their benefits to comply with Obamacare.

For instance, 50 percent of those surveyed say they no longer have any annual benefit limits, while 32 percent say they did not make any changes to their annual limits this year. The healthcare law restricts and is phasing out the annual limits already and in 2014, there will be no annual limits.

In addition, 51 percent believe that the state health insurance exchanges would be a viable option for health insurance for some retirees, while 16 percent believe the exchanges could be an option for current full-time employees, according to The Washington Post.

"Rising healthcare costs continue to plague employers at an alarming rate," said Helen Darling, president and CEO of the National Business Group on Health. "Although cost increases have stabilized somewhat, they are still on a higher base from last year and are simply not sustainable, especially when our nation's economy and workers' wages are virtually flat and everybody is struggling."

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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