In spite of Obamacare Rules, Employer Expense Trend Slows In 2015

Health benefit costs for large employers are expected to rise 6.5 percent next year, a slower rate of increase than this year as companies implement myriad new ways to mitigate medical inflation, according to a new analysis.

The National Business Group on Health, an association of about 400 large employers, said companies are dangling more incentives in front of their workers to stay healthy, using “narrow networks” known to limit doctor choices and increasing cost-sharing via higher co-payments and deductibles for worthers. The national business group said the rate of increase was 7 percent this year and could even be lower next year, falling to 5 percent if employers implement various cost-containment strategies.

Many of these changes are being implemented to comply with the Affordable Care Act, particularly an excise tax that will be implemented in 2018. The tax, also known as a fee on “Cadillac” health plans is levied when benefits exceed a predetermined threshold. Here’s one insurer’s more detailed explanation of such plans linked here.

“Despite the many distractions that the Affordable Care Act (ACA) has created, large employers haven’t lost sight of the fact that rising health care costs remain a significant issue that needs to be constantly addressed,” said Brian Marcotte, president and chief executive officer of the National Business Group on Health in a statement accompanying the new analysis.

NBGH’s membership is diverse, including employers like Boeing Boeing (BA), Pfizer Pfizer (PFE) and Coca-Cola Coca-Cola (KO) along with health insurers Aetna (AET), Humana (HUM), UnitedHealth Group (UNH) and most Blue Cross and Blue Shield plans. Most of the members surveyed, or about 83 percent, are companies with more than 10,000 employees.

English: Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

“Many employers are, in fact, taking necessary steps to rein in costs,” Marcotte said. “This includes partnering with workers to engage in health care decisions and educating them to be better health care consumers, as well as sharing more costs with workers and narrowing their benefit options.”

For example, more than half, or 57 percent of employers are expanding consumer-directed health plans. These plans often come with a high deductible and a contribution from the employer for employees to put toward their costs. But they generally lead to lower costs when employees, faced with the financial implications of their health benefit choices, tend to shop for better deals.

National Business Group on Health said the survey showed a “nearly 50 percent increase in the number of employers that plan to offer a (consumer-directed health plan as their only benefit plan option next year.” All told, 32 percent plan to offer a consumer-directed plan in 2015 compared to 22 percent this year, the business group said.

Wondering how Obamacare will affect your the cost of your health care? The Forbes eBook Inside Obamacare: The Fix For America’s Ailing Health Care System answers that question and more. Available now at Amazon and Apple.

In spite of Obamacare Rules, Employer Expense Trend Slows In 2015