It's that time of year where we start to think about healthcare costs, open enrollments and all things health. Employers are anticipating one of the largest increases in healthcare costs in the past decade for 2024. In this newsletter we are breaking down why and what you can do about it.
EMPLOYERS ANTICIPATE 7% RISE IN HEALTHCARE COSTS FOR 2024
"Fueled by chronic health conditions, catastrophic health claims and rising prescription drug prices, health care costs will experience a sizable hike next year, employers say.
U.S. corporate employers project a median health care cost increase of 7 percent for 2024, according to new data from the International Foundation of Employee Benefit Plans (IFEBP), a nonpartisan group with more than 31,000 members. It's the second year in a row that employers have projected a 7 percent hike. The foundation's survey of 171 employers, conducted in early August and released this week, is important information that indicates that inflation continues to have an impact, although the numbers are not too surprising, said Julie Stich, vice president of content at IFEBP. "This is consistent with what we were expecting to see," she said." Learn more
BIGGEST JUMP IN A DECADE
"U.S. employers are bracing for the largest increase in health insurance costs in a decade next year, according forecasts from healthcare consultants, but workers may be somewhat spared this time around in a tight labor market. Benefit consultants from Mercer, Aon (AON.N) and Willis Towers Watson (WTW.O) see employer healthcare costs jumping 5.4% to 8.5% in 2024 due to medical inflation, soaring demand for costly weight-loss drugs and wider availability of highpriced gene therapies. A survey conducted by Mercer, a unit of Marsh McLennan (MMC.N), found over two thirds of employers either do not plan to shift any cost increase to their staff or will pass on less than the expected rise in 2024.
They don't want to add more financial stress on employees who are also coping with inflation, especially in this time where they're really relying on their health benefits as a way to keep employees working for them," said Beth Umland, Mercer's director of health & benefits research." Learn more
3 COST-SAVING BENEFIT TRENDS
"A trifecta of benefits trends emerged in the first half of this year that are expected to gain greater steam as we enter the second half of 2023 and HR executives will want to watch them closely—because some can directly affect your organization’s costs.
“Healthcare is your second-biggest cost, so any way that we can make sure that benefits spend is managed as efficiently as possible is going to eventually help employees,” says Kelly Conlin, U.S. Health Practice Leader and Chief Health Actuary for Buck, an HR, pension and benefits consulting firm. “Otherwise, it’s going to result in higher premiums for employees to pay year after year.” Here are the three trends that are expected to accelerate in the coming months, as well as two emerging issues that should be on the radar of HR and benefits leaders." Learn more