Health Benefits Costs Up, Employees Could Pay More [AUDIO]
According to the National Survey of Employer-Sponsored Health Plans, conducted annually by Mercer, growth in the average total health benefit cost per employee, which had reached 6.9% last year, slowed in 2011 to 6.1%, with an increase of 5.7% expected for 2012.
Cost averaged $10,146 per employee in 2011.
Mercer's nationally projectable annual survey includes public and private organizations with 10 or more employees; 2,844 employers responded in 2011.
"In a tough economy where high benefit cost increases often have to be balanced with lower pay increases, cost management is already important," said Rich Fuerstenberg, a Partner in Mercer's Princeton office. "But given the new cost pressure from health reform and with the cost of health benefits nearly $12,000 per employee in New Jersey, for many employers it's becoming an imperative."
Fuerstenberg says as,ed about their 2012 costs, New Jersey respondents estimated that if they made no changes to their current plan, cost would rise by 8.8%. "However, they expect to hold their cost increase to 6.5% by making changes to plan design and/or plan vendors."
The bad news, he says, is that 73% say they will shift costs to their employees in 2012 by raising deductibles, copays/coinsurance or out-of-pocket maximums, increasing employees' share of the premium contribution, or some other way.
The good news is that more employers in the state are giving employees the ability to lower costs through wellness and health management programs. "Especially during open enrollment, employees will see incentives to complete health risk asessments and quit smoking."
Fuerstenberg says when asked how likely they are to terminate their medical plans after the state insurance exchanges become operational in 2014, 6% of New Jersey respondents say they are likely or very likely to do so. Nationally, 9% of large employers and 19% of small employers say they are likely or very likely to terminate their plans.
"Certainly the exchanges are going to be a critical issue for employers to see if they can maintain their costs with these consumer-driven plans or if they are going to go for the state insurance exchanges."