US employers keep passing rising healthcare costs to workers. There are better options
Summary
Mercer expects employers’ health benefit costs per employee to rise 8.2% in 2027 after planned cost-cutting measures, the largest increase since 2003. The article describes alternatives to shifting more costs to workers, including individual coverage reimbursement arrangements, health savings accounts, self-insurance and help choosing plans.Key Facts
- Mercer’s study projects an 8.2% rise in employer health benefit costs per employee in 2027 after planned cost-reduction measures.
- Employers told Mercer that costs under their existing plans would rise about 11% without action.
- The article cites a Wall Street Journal report that employees’ share of health costs has risen faster than health costs overall.
- The article says 44% of small companies do not offer health benefits.
- An individual coverage health reimbursement arrangement lets an employer reimburse workers who buy their own health insurance instead of buying group coverage.
- Health savings accounts let eligible workers use pre-tax contributions for certain medical expenses; account balances can grow tax-free and remain with workers if they change jobs.
- Some small employers use level-funded plans, which combine employer payments for claims up to a set amount with insurance for larger claims.
- The article also describes negotiating rates with local providers and pharmacies and hiring consultants to help employees compare health plans.
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