Mercer | https://www.mercer.us | Mercer Identifies 5 Major Trends Shaping Healthcare Today
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The rising costs of healthcare coupled with the Excise tax, or Cadillac Tax, are an impetus for employers to control the cost of health benefit plans for themselves and employees. Healthcare benefits are a key factor in employee retention, even more so than salary. Mercer conducted a national survey of employer sponsored health plans and identified 5 major key trends that are contributing to the way in which employers provide employer sponsored health benefits to employees.
Transcript: Health benefits are changing faster than ever. This year nearly 2500 organizations of all sizes took part in our national survey of employer sponsored health plans. Organizations provided detailed information about health plan offerings and design, current and projected cost, and strategies in place to control cost, engage employees, and meet business and HR objectives.
We spotted 5 major trends that are shaping healthcare today. First, the Excise Tax aka as the Cadillac tax, motivated employers to take bold action to control cost and their efforts were a factor behind 2015’s modest cost growth. Although the health benefit trend has slowed nationally, many employers still struggle with unsustainable increases and remain at risk of hitting the Excise Tax cost threshold in 2020.
Second, employees are going shopping. High deductible consumer driven health plans are a key strategy for controlling costs and avoiding the excise tax. New options like telemedicine and retail clinics, give patients lower cost alternatives to office visits while new tools let them comparison shop for services so they can stretch their healthcare dollars even with a high deductible.
Third, employers are embracing technology to build a healthier workforce. One quarter of large employers are encouraging employees to track physical activity with wearable devices while 30% are using mobile apps to engage employees to care for their health.
Fourth, despite the challenges of health reform and the opening of public exchange, large employers remain committed to providing healthcare coverage. For a while, small employers weren’t so sure, but that’s changing. Now, fewer small employers believe it’s likely they will drop their plans and send employees to the public exchange in the next five years. 93% of employers with 50 -499 employees now say they’ll keep their plans up from 79% in 2013
Fifth, health benefits change how employees feel about work. 89% of employees said that getting health benefits through work is just as important to them as getting a salary.
People want to feel good about their benefits. What will 2016 look like? We expect to see plenty of change. Employers told us they expect to hold cost increases to just 4.3% on average in 2016. If they made no changes however, costs would rise by 6.3%. That’s why about half of all employers have made changes in 2016. The healthcare market is changing rapidly, but employers large and small, are rising to the challenge.
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