.

Employer Health Benefits Costs Slow, and Other Key Trends - Mercer 2013 Survey

November 26, 2013
XL_office_desk_work_hero

Last week, Mercer released their annual National Survey of Employer-Sponsored Health Plans. According to they survey's findings, the cost of employer health benefits slowed to 2.1% growth in 2013 - with the average cost per employee averaging $10,779/year (including medical, dental, and other health coverage). However, employers expect the rate of growth to rebound next year, to 5.2%. 

The national survey included responses from ~2,800 public and private US organizations with 10 or more employees. Here's a review of their findings.

Summary of Key Findings

  • Health benefits costs rose faster for very large employers (5,000+ employees) who saw average increases of 3.7% compared to ~1% for employers with less than 500 employees.

  • The rate of growth varied by US region. The South saw a 5.3% increase, Northeast a 3.3% increase, West a 1% increase, and Midwest only a 0.1% increase.
  • To reduce cost increases, small employers shifted more costs to employees via higher deductibles. Larger employers were more likely to use consumer-directed health plans or employee health management programs to control costs.

  • Looking to 2014, employers anticipate increase costs to cover more employees, as it's anticipated fewer employees and dependents will opt out of employer coverage because of the individual mandate.

  • From 2012 to 2013, consumer-directed health plans (CDHPs) rose from 16% to 18% of all covered employees, respectively. There are now as many CDHP enrollees as HMO enrollees nation-wide.

  • 6% of larger employers say they will terminate their employee health plans in the next five years in favor of the public health insurance exchanges.

  • The number of small employers that say they are likely to terminate their health plans in the next five years increased from 22% in 2012 to 31% in 2013.

Source: Mercer National Survey of Employer-Sponsored Health Plans 2013

Chart Highlights

Mercer_Figure_1

Mercer_Figure_2

Mercer_Figure_3

Mercer_Figure_4

Mercer_Figure_5

Mercer_10

Source and more charts here: Mercer National Survey of Employer-Sponsored Health Plans 2013

Mercer_11

Map source: Mercer via Business Insurance News.

Survey Methodology

According to Mercer's website, the National Survey of Employer-Sponsored Health Plans is conducted using a national probability sample of public and private employers with at least 10 employees; 2,842 employers completed the survey in 2013. The survey was conducted during the late summer, when most employers have a good fix on their costs for the current year. Results represent about 800,000 employers and more than 105 million full- and part-time employees. The error range is +/–3%. For more information on methodology, visit www.mercer.com/ushealthplansurvey.

The Comprehensive Guide to the Small Business HRA

Learn how an HRA works for employers in our latest webinar
Watch the recording today, and learn how an HRA can help your organization.
WATCH THE WEBINAR
meeting_wide-1 CTA_purp_R