Healthcare Business News

Survey finds slower rise in benefits costs

By Ashok Selvam
Posted: November 16, 2011 - 3:30 pm ET

Though the cost of employee health benefits continues to rise, this year's increase is lower than 2010's and will continue to slow in 2012, according to survey results from Mercer.

The latest edition of the consultant firm's annual health plan survey showed overall health benefit costs grew by 6.1% in 2011, compared with 6.9% in 2010. Officials forecast a 5.7% rate of increase in 2012.

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Mercer is calling 2011 record-breaking, with employers adding the most consumer-directed health plans, as 32% of employers with 500 or more employers offer such plans, versus to 23% in 2010. Small employers, those with 10 to 499 workers, are also more likely to offer CDHPs, going from 16% in 2010 to 20% in 2011.

The survey notes that the Patient Protection and Affordable Care Act triggered a provision this year requiring employers extend coverage to employees' children up to age 26. That resulted in enrollment increasing by an average of 2% in 2011. Meanwhile, the number of large employers offering plans to Medicare-eligible patients dropped to a record low at 16% and 24% of large employers offering plans to retirees under 65. That's down from 19% and 25% last year.

The No. 1 concern from employers, Mercer says, is the choice they'll make in 2014 to either offer coverage to workers or a pay a penalty. For small employers, 19% said they'll drop plans, down 1% from last year. Meanwhile, 9% of large employers said they'd drop coverage, rising 3% compared to 2010.

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