More than 80% of U.S. employers expect to make changes to their health benefit programs over the next three years, despite cost increases remaining at historically low levels, according to new research from the Towers Watson HR consulting firm.
In addition to aggressively managing costs, employers are embracing new ways to deliver care through innovative network arrangements, focusing on increasingand exploring new options for delivering benefits.
Towers Watson’s 2015 Emerging Trends in Health Care Survey found that employers project health care costs to increase 4% in 2015 after plan changes, compared to the 4.5% employers predicted for 2014. Without plan changes, costs are projected to increase 5.2%.
Those modest increases are still more than double the current rate of inflation and are a primary factor driving employers’ affordability concerns as the Affordable Care Act’s excise “Cadillac tax” approaches in 2018. Two-thirds say the tax will affect their health benefits strategies.
Among the actions gaining traction are changes to benefits for spouses and dependents.
For example, the percentage of employers using spousal surcharges (when coverage is available elsewhere) is expected to double, from 32% now to 61% in three years. Half of respondents (53%) plan to significantly reduce subsidies for spouses and dependents by 2018.
To encourage employees to take control of their health, 51% of employers plan to adopt or expand the use of financial incentives to encourage healthy behaviors.
Employers continue to explore new ways to deliver health benefits, with many taking a closer look at private insurance exchanges. Seventeen percent said they view private exchanges as a viable alternative for active full-time workers in 2016. Confidence more than doubles to 37% by 2018. A quarter of employers have extensively analyzed private exchanges, and 20% say they are more interested in adopting a private exchange today than they were a year ago.