Employer survey: Cost of providing healthcare coverage expected to increase by 7% in 2014

Large employers looking for creative solutions to help mitigate costs, including on-site clinics and wellness programs

WASHINGTON — The cost of providing employee healthcare benefits at the nation's largest employers is projected to increase 7% in 2014 — the third-consecutive year employers have budgeted this amount, according to a new survey by the National Business Group on Health, a nonprofit association of more than 265 large U.S. employers. The survey also found that some employers believe health insurance exchanges could be a viable option for certain populations. Additionally, more companies plan to offer workers a consumer-directed health plan as their only health benefits option in 2014.

"Rising healthcare costs remain a serious concern for U.S. employers," said Helen Daring, president and CEO of the National Business Group on Health. "Employers spent considerable time and energy this year designing health plans that comply with the various provisions of the Patient Protection and Affordable Care Act that would have become effective next year," stated Helen Darling, president and CEO of the National Business Group. "And while the decision to delay provisions related to the employer mandate has provided respite from some of these requirements, the pressure remains on employers to lower costs. Interestingly, many respondents indicated that a portion of their budgeted costs for 2014 was to implement changes mandated by the Affordable Care Act. With the delay, it is unclear how employer costs will be affected."

Employers who were surveyed expressed an interest in healthcare offering designs that readily engaged workers in health management and healthy lifestyles. The survey found that implementing a consumer-directed health plan was considered the most effective tactic to control rising costs, cited by more than one-third of respondents (36%). In fact, nearly three-quarters of employers (72%) now offer at least one consumer-driven health plan, or CDHP. This number has remained relatively steady over the last couple of years. However, the number of employers that are offering only a CDHP plan to employees continues to rise, with 22% planning to implement a total replacement CDHP plan next year, up from 19% this year.

The survey asked employers about a variety of initiatives they use to manage the health of their employees. More than 4-in-10 respondents (44%) currently have an on-site clinic in at least one of their locations, with 9% expecting to build a clinic next year. 

Employers cover a variety of services/medications for the treatment of obesity and severe obesity. Nearly two-thirds of respondents (66%) will cover surgical interventions for the treatment of severe obesity in 2014. Additional treatments covered by some employers include FDA-approved medications (36%) and intensive, multi-component behavioral interventions for plan participants with a BMI of more than 30.

Respondents also were asked about common wellness programs. Nearly all employers offer a tobacco-cessation program (89%), and 77% offer telephonic or on-site health coaching. More than half of respondents (55%) also make on-site weight management programs available to employees. The vast majority also conduct health assessments (88%) or biometric screenings (83%).

"Employers continue to implement numerous tactics to control costs, improve employee health and productivity and ensure the delivery of high-quality health care to their employees and dependents," Darling said. "Some employers are taking creative approaches in their efforts to win the war on rising health costs. These include managing specialty and non-specialty pharmaceuticals, contracting directly with providers who have been shown to provide high quality health care, as well as offer employees numerous programs designed to help them live a healthy life."

The survey, based on responses from 108 of the nation's largest corporations, was conducted in June 2013 prior to the Obama administration's decision to delay for one year the implementation of the employer mandate.

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