Total health-benefit costs rose 3.4 percent, on average, in 2020, reaching $13,674 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 2020,” which the firm released Dec. 8. The 3.4 percent figure represents “the lowest annual health-cost increase in over two […]
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Total health-benefit costs rose 3.4 percent, on average, in 2020, reaching $13,674 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 2020,” which the firm released Dec. 8.
The 3.4 percent figure represents “the lowest annual health-cost increase in over two decades,” per an infographic from Mercer. Employers also demonstrated “concern” about workforce behavioral health as the pandemic continues to disrupt lives and business.
Mercer conducted its “flagship survey” of 1,812 U.S. employers between July and September 2020.
Early results from that same survey indicated the nation’s employers expect “moderate” health-benefit cost growth for 2021 of 4.4 percent, on average, compared to 2020. Mercer had announced the early findings Oct. 1.
The increase, based on 1,113 employer responses since early July, is “largely in line” with the average annual-cost growth over the past six years.
Large employers — those with 500 or more employees — reported a cost increase of just 1.9 percent, their lowest increase since 1997, as plan members avoided health-care facilities due to the pandemic, per the Dec. 8 information.
Large employers typically self-fund their plans, which means they may see costs fall as utilization falls, unlike fully insured employers that pay a fixed premium. Survey results suggest that many large employers plan to use money saved in 2020 to invest in programs to “support and engage” employees in 2021.
“The need to minimize exposure to the virus and ease the strain on overloaded health facilities caused many people to forgo care this past year, which translated to slower cost growth in 2020. Heading into 2021, that’s allowed employers to avoid cost-management tactics like shifting cost to employees,” Tracy Watts, a senior consultant at Mercer, said. “Instead, we’re seeing many focus on supporting employees with additional resources to help keep them engaged, productive, and healthy during these tough times.”
Amid concerns that workers are not getting the support they need, employers are making behavioral health a “top priority” in 2021, providing manager training and adding new resources. Child-care issues remain a “tough problem,” per the Mercer infographic.
The survey also found that the top five well-being priorities for 2021 include behavioral health (75 percent); diabetes (49 percent); financial well-being (48 percent); nutrition and weight management (40 percent); and physical activity (39 percent).
Telemedicine
Telemedicine-utilization rates are “climbing,” according to the Mercer data, and employers are generally pleased with how their programs are performing. Many have waived copayments to encourage use, and most foresee a larger role for all forms of virtual care going forward.
The survey found the average percentage of eligible members (including family members) using the service at least once during the plan year was 14 percent during the first half of 2020. That figure is up from 9 percent for all of 2019 and 2018; up from 8 percent in 2017; and up from 7 percent in 2016.
The survey also found that most employers were satisfied with the performance of their telemedicine vendor during the pandemic. The data indicates that 25 percent were very satisfied; 48 percent were satisfied; 2 percent were not very satisfied; and 24 percent didn’t have enough feedback to say.
The Mercer survey also found that 80 percent of employers anticipate a larger role for virtual care in general in their health programs in the future, per the infographic.