A new survey by the National Business Group on Health shows that most large employers plan to ask employees to share a greater portion of the costs for health benefits in 2012. Employers are also increasingly turning to consumer driven health plans in an effort to control costs.
According to the survey, employers anticipate an average increase of 7.2 percent for their health benefit costs next year. While this is slightly lower than this year's 7.4 percent increase the rate of growth is still more than double the rate of inflation and outpaces the rate of overall economic growth. The survey, based on responses from 83 of the nation's largest corporations, was conducted in June 2011.
"Employers are facing a multitude of challenges posed by rising healthcare costs, the weak economy and the financial and administrative impact of complying with the new health reform law," said Helen Darling, president and CEO of the National Business Group on Health in a press release announcing the findings. "As a result, employers are being much more aggressive in their use of cost sharing techniques and cost control programs, and are making certain that employees have more reasons to be cost-sensitive healthcare consumers."
To help control healthcare benefits cost increases and begin lowering costs to avoid the "Cadillac" tax, employers are planning to use a wider variety of cost-sharing strategies. More than half of respondents – 53 percent – plan to increase the percentage that employees contribute to the premiums, while 39 percent plan to increase in-network deductibles. In addition, 23 percent of employers plans to increase out-of-network deductibles and 22 percent will increase out-of-pocket maximums next year.
[See also: Rand: High-deductible health plans produce good and bad outcomes; Consumer-driven health plans increase rolls to 22 million in 2010]
Consumer-directed health plans continue to gain steam among employers as a means of controlling costs, with nearly three-in-four (73 percent) anticipating offering at least one such plan as an option for 2012. This marks a significant increase from the 61 percent of employers who offered these plans this year.
The survey also detailed a number of specific changes employers are making as a result of new regulation contained in the health reform law. These changes include:
Annual Benefit Limits: Fifty-nine percent of employers are not making any changes for 2012, (full restrictions on benefit limits will be banned in 2014). However, more than one-fourth (27 percent) are making changes to annual limits for preventive and wellness services and another 14 percent are making changes to annual limits for mental health and substance abuse services.
Grandfather Status: Nearly one-in-four employers – 23 percent – will have at least one benefit option that keeps its grandfather status in 2012 while 19 percent will drop its grandfather status. Nearly one half (49 percent) did not have any benefit option in grandfather status this year.
Default Plan for New Hires: Twenty-seven percent of employers plan to use their least costly health plan for employees as their default plan for new full-time hires as required. Slightly fewer (19 percent) plan to use their least costly plan as the default plan.
"Employers understand that affordability is tied to employees' premium costs and household incomes so they have two strong arguments for aggressively driving down costs -- both theirs and employees," Darling added. "That said, the federal government has to start helping reduce costs too. Like the national debt crisis that we are struggling to solve, we have to solve the healthcare cost crisis, which is seriously undermining our economy, businesses' abilities to create jobs, working families, our global competitiveness and our standard of living."