Health Benefit Costs for Large Employers – Up 6% again in 2017

By Claire Thayer, August 12, 2016

This week, the National Business Group on Health released their Large Employers’ 2017 Health Plan Design Survey, with the ‘good’ news that the overall health benefit costs were only expected to increase 6%.  Says Brian Marcotte, president and CEO of the National Business Group on Health, “interestingly, current estimates have health insurance premiums for the average public exchange plan increasing by at least 10%, about twice what large employers are projecting for next year. This is a clear indication that the employer-based health care model continues to be the most effective way to provide health insurance coverage to employees and their families.”

Spending on pharmaceuticals and specialty drugs are contributing factors in the overall growth of health care benefit costs.  The survey reports that overall, 80% of employers placed specialty pharmacy as one of the top three highest cost drivers, followed by high cost claimants (73%) and specific diseases and conditions (61%).

The survey offers highlights of what employees will see during their upcoming open enrollment:

• Telehealth services on the rise: Nine in 10 employers (90%) will make telehealth services available to employees in states where it is allowed next year, a sharp increase from 70% this year.
• Consumer-Directed Health Plans (CDHPs) increase slightly: Overall, 84% of employers will offer a CDHP in 2017, up from 83% this year. In addition, more than one-third of employers (35%) will only offer CDHPs to employees in 2017, a slight increase from 33% this year.
• Spousal surcharges leveling off: One in three employers (33%) will have surcharges in place for spouses who can obtain coverage through their own employer, roughly the same as this year. A few employers will exclude spouses when other coverage is available through an employer.
• Expanded options at Centers of Excellence grow. The use of Centers of Excellence will grow from 79% this year to 85% in 2017. The largest increases will be for bariatric surgery (up 15 percentage points), transplants and fertility treatments, both up 8 percentage points.
• Tools to manage care: Eight in 10 respondents (80%) plan to offer nurse coaching for care and condition management while 72% will offer nurse coaching for lifestyle management. Nearly two-thirds (65%) will provide employees with self-service decision-making tools to help them become better health care consumers.