Total health-benefit costs rose 6.3 percent, on average, in 2021, reaching $14,542 per employee among all U.S. employer health-plan sponsors with 50 or more employees. That’s according to the annual Mercer “National Survey of Employer-Sponsored Health Plans” for 2021, which the firm released Dec. 13. The rise follows last year’s increase of just 3.4 percent, according to […]
Total health-benefit costs rose 6.3 percent, on average, in 2021, reaching $14,542 per employee among all U.S. employer health-plan sponsors with 50 or more employees.
That’s according to the annual Mercer “National Survey of Employer-Sponsored Health Plans” for 2021, which the firm released Dec. 13.
The rise follows last year’s increase of just 3.4 percent, according to Mercer. The firm says employees and their families resumed care after avoiding it last year due to the pandemic. Employers also halted traditional cost-management strategies — like shifting cost to employees — as they focused on improving health-care affordability and access to mental-health care for their workforce.
With the highest annual increase since 2010, health-benefit cost outpaced growth in inflation and workers’ earnings through September, raising the question of whether employers are seeing a temporary correction to the cost trend, or the start of a new period of higher cost growth, Mercer posited.
Employers are projecting — on average —a “fairly typical” cost increase of 4.4 percent for the year ahead.
“Employers seem optimistic that this year’s sharp increase is simply a result of people getting back to care,” Mercer’s chief actuary, Sunit Patel, said in a release.
However, he cautioned that a number of factors could result in ongoing cost growth acceleration. “At the top of the list of concerns are higher utilization due to “catch-up” care, claims for long COVID, extremely high-cost genetic and cellular drug therapies, and possible inflation in healthcare prices,” he said.
Mercer suggested that in a tight labor market, employers can optimize health-benefit value with quality initiatives, virtual care, and personalization of benefits.
