As companies are planning for the impact that inflation will have on their health plan costs, they are also considering the impact this will have on employees. And of course benefits has always been a large factor in attracting employees.
So when Mercer released its Health and Benefit Strategies for 2024, they looked into how employers will prepare for rising health care costs while continuing to adapt benefit to improve attraction and retention and better meet the needs of the whole workforce. The survey was conducted from February 14 through March 10, 2023.
The firm reports that the average per-employee cost of employer-sponsored health insurance rose by 3.2% in 2022, according to its Mercer’s 2022 National Survey of Employer-Sponsored Health Plans. This relatively modest increase was only about half the rate of general inflation for 2022, which ended the year at 6.5%.
The group notes that typically, health benefit cost growth runs higher than the CPI. One factor holding down cost growth in 2022 was simply timing — because healthcare providers typically have multi-year contracts with health plans, employer plan sponsors were shielded from the full impact of inflation.
"However, we can expect that wage increases and higher supply costs in the healthcare sector will result in higher prices over the next few years as provider contracts are renewed. Employers projected an average cost increase of 5.4% for 2023, and we should be prepared for continued accelerated cost growth in 2024 and beyond," the report said.
Strategies
A majority of respondents to the survey, 64% said they were making enhancements to their health and well-being offerings in 2024. While 28% aren't planning to do this, they have within the past two years. And just 8% were not making any enhancements.
One aspect of the report discusses the benefits that will be offered in 2024 that fall into the category of financial support work and living expenses. Employers are providing other forms of support to address financial wellness.
The breakdown of the benefits as as follows:
- Free/Subsidized meals at work 21%
- Subsidized phone/internet for remote working 21%
- Stipend for home office set-up/supplies 19%
- Employer-provided of subsidized transportation 18%
- Student loans-refinancing assistance 14%
- Lifestyle account for well-being activities 13%
- Employer-paid legal services 9%
- Employer-provided or subsidized housing 2%
The report also discusses a variety of other strategies including addressing healthcare affordability.