A recent study by Wells Fargo Insurance indicates that employers expect their healthcare costs to rise again in 2016. Nearly 60% of employers surveyed expected their medical plan costs to exceed ACA excise tax thresholds (recently delayed until 2020). Additionally, seventy percent of employers expect their budgets for benefit plans to increase, as workplace health and productivity remain key issues and indicators of competitive efficacy. The survey assessed more than 650 middle-market companies and large corporations to better understand how organizations are responding to healthcare reform requirements.
Over half of employers surveyed said that they’ll continue to modify their plans in the next 18 months by adding a high deductible plan option, increasing the employee contribution percentage, or increasing co-insurance features. Employers will further refine plans to address not only the physical well-being of their employees, but also chronic condition management and mental, financial, and social well-being. Employers indicated that a multi-pronged approach was both desirable and necessary, encompassing:
- Voluntary benefit solutions – As more employers offer high deductible health plans, the C‑suite is also aware of the financial exposure that employees face with these types of plans. As a result, they are looking to mitigate those costs by offering voluntary benefits solutions (e.g. critical illness and accident insurance).
- Wellness offerings – Employers of all sizes are seeking ways to encourage a healthier and more productive workforce. Fifty one percent of companies expect to increase wellness offerings, and 37 percent will add wellness incentives or penalties to their programs in 2016.
- Focused on return on investment (ROI) – 91 percent of C-suite respondents said improving the health of employees is important as it correlates with lower medical costs, reduced absenteeism, and increased productivity.
The study also found that executives are making changes to their plans because of an increased focused on attracting and retaining talent, with 62 percent saying it is a top concern, up from 45 percent last year. To learn more, contact us.