Group health plan costs will nearly double the increase businesses experienced in 2017, according to surveys conducted by varied business advocacy groups. Plan costs are expected to rise 4.3 percent, even after plan changes and other measures to reduce costs. Without changes, the rise would be closer to 6 percent.
That figure is far below the rises business owners experienced around the turn of the millennium, when they rose as much as 14 percent in one year, but they will still have an impact. The increase will likely be felt across the board, and small and midsized business owners (SMBs), many of which already feel priced out of the market, will feel the pinch even more. On the upside, with the ACA repeal not going through (and with little chance it will, at this point), SMBs of 25 employees or fewer will still be eligible for a tax credit to offset insurance costs.
To address the increase, many large employers predict they will enact cost control strategies, such as how health care is delivered and paid for, per an annual survey by the National Business Group on Health. These adjustments will be in addition to pursuing traditional cost-control methods, such as cost sharing and plan design changes. As a result, many companies may offer their personnel a broader range of health care services, including telemedicine (remote doctor consultations via Internet, for example,) and onsite health centers during open enrollment.
Small Businesses Take a Hit, but Options Remain
As with a lot of big business cost-cutting initiatives, many SMBs will have a harder time adjusting for the increase. They often lack the resources and/or time to pursue many of the more original cost-saving measures for counteracting premium increases, unless they work collectively with other businesses locally or through small business associations or outsourced benefits firms.
Telehealth, which has been or will be adopted by 96 percent of large employers, is one creative option that is easily accessible to SMBs. It reduces costs and complexity not only for inquiries and preventive care but also for diagnoses of common medical problems, post-treatment check-ins, chronic care follow up, and authorization for prescription refills.
Plan Creativity Helps, Too
Employers are also getting inventive with coverage in their efforts to control both their costs (70 percent of total) and their employees (30 percent), per the Large Employers’ 2018 Health Care Strategy and Plan Design Survey. For 2018, per the survey, 90 percent of large employers will offer at least one Consumer Directed Health Plan (CDHP). 40 percent say it will be their only plan option. The most common CDHP approach is a high-deductible health plan (HDHP) paired with a Health Savings Account.
SMBs will continue to have access to the ACA’s Small Business Health Options Program (SHOP). SHOP provides SMBs with year-round access to health plans, and it allows employers to offer multiple plans as well as decide how much of the premiums they wish to pay. For more about SHOP, click here.)
“Employers are recognizing that traditional cost control techniques alone aren’t able to reduce costs to the point where they are no longer a drain on the bottom line,” said Brian Marcotte, president and CEO of the National Business Group on Health, in a prepared statement. ” We expect them to increasingly focus on value purchasing opportunities within the delivery system and improving the experience for health care consumers. Finding solutions to the growing challenge of skyrocketing specialty pharmacy costs will also remain a top priority.”
*The Large Employers’ 2018 Health Care Strategy and Plan Design Survey was conducted between May and June 2017. A total of 148 large employers participated in the survey. Collectively, respondents represent a wide range of industry sectors and offer coverage to more than 15 million employees and their dependents. Two-thirds of respondents belong to the Fortune 500 and/or the Global Fortune 500, and 42 belong to the Fortune 100.