Affordability of Healthcare for Employees Cited as Chief Focus of US Employers in Mercer's 2019 National Survey

Mercer’s 2019 National Survey of Employer-Sponsored Health Plans highlighted 3 key areas of focus for employers in 2019, which were balancing affordability and choice, empowering employees to improve their health through tech-enabled solutions, and addressing high-cost claims.

The survey included input from 2558 HR professionals and found that health benefit cost will be approximately $13,046 per employee this year, an increase of 3.0% from last year. As last year additionally grew from 2017 by 3.6%, the stark increase in health benefit cost has become a cause of concern for numerous employers trying to balance their healthcare budget. To combat the eighth consecutive year of health benefit cost growth, employers have begun to implement strategies to curb rising costs.

Balancing Affordability and Choice

Designing health plans for employees requires addressing a spectrum of needs across the workforce. When surveyed on their priorities for the next 5 years, 42% of large and midsize (500 or more employees) chose “addressing healthcare affordability for low-paid employees” as an important or very important strategy. Employers have started halting requirements for members to pay more out-of-pocket costs, as even some larger employers who had offered a high-deductible plan with a Health Savings Account (HSA) as their only medical plan have decided to add a traditional Preferred Provider Organization or a Health Maintenance Organization as an option.

Tracy Watts, BS, National Leader for U.S. Health Policy at Mercer, highlighted that this transition is to provide more diversity in health plans which can attribute to growing employee needs. “This doesn't mean HSA plans are going away, but to meet the various needs and budgets of today’s five-generation workforce, employers are increasingly offering an array of health benefit plans. In fact, many employees who do the math at open enrollment find an HSA is a smart financial move. But for those with little savings or significant health issues, another plan might be a better fit,” said Watts.

Empowering Employee Health Through Tech-Enabled Solutions

The high competition among employers to offer innovative benefits to employees has caused many companies to look for solutions that do not shift costs to employees. Tech-enabled programs have become popular amongst employers to manage chronic conditions or other health needs such as musculoskeletal conditions, infertility, and insomnia. In 2019, targeted health solutions were shown to be offered by 58% of all large and midsize employers, and 78% of those with 20,000 or more employees.

Telemedicine was a chief trend in employer survey results as 9 out of 10 employers were shown to offer the program to members. This tech-enabled service promotes greater access to care as it limits out-of-pocket costs by less than half of a regular office visit. Teletherapy, seen as a potential solution to shortages of behavioral health providers, is an area of focus as well, as it is now offered by 42% of employers with 5000 or more employees.

Addressing High-Cost Claims

Employers have began utilizing innovative patient-centered programs to address the biggest source of health plan cost, complex care. The evolution of medical science to manufacture innovative treatments and drug therapies has caused high-cost claims to rise, which increases the cost of coverage for both employees and employers. In figure 3 of the report, most employers (48%) chose monitoring/managing high-cost claimants as important or very important in the survey.

Choosing the right treatments tailored to patients has become a difficult task that has contributed to the oversaturation of healthcare spending. The largest employers are taking initiative by offering enhanced health advocacy and intensive case management services that assist employees in making informed decisions on their healthcare needs. "Health advocates help patients and their families navigate a complex healthcare system to get to the right provider at the right time. When care is better coordinated, we often see less wasteful healthcare spending," said Watts.