Large Employers Project 7 Percent Increase in Health Care Benefit Costs in 2014

For the third year in a row, the cost of providing employee health care benefits is expected to increase 7 percent at the largest employers in the United States. The National Business Group on Health surveyed responses from 108 of the country’s largest employers to look at costs and plan design changes for 2014. The survey was conducted based on the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) before the Obama administration announced its decision to delay the employer mandate by one year; the impact of the delay on employers’ projected budgets is unknown.

Cost Increases

The survey found that health care costs are a serious concern for U.S. employers. Many corporations spent considerable time and energy designing PPACA-compliant health plans, which many survey respondents indicated as a cause for a portion of the projected health care cost increases. Large employers will not be eligible to participate in state health exchanges until 2017 at the earliest, but employers expect that certain populations may find exchanges to be a viable option on an individual basis in 2014. Employers believe that some employees might find joining a public health exchange to be the most cost effective option, particularly COBRA plan participants, pre-65 retirees, and some part-time employees. The survey found that only 3 percent of employers are considering eliminating health care coverage.

Employee Health Initiatives

The survey found that companies consider implementing a consumer-directed health plan (CDHP) to be the most effective tactic to control rising costs. A large majority of employers offer at least one CDHP as part of the options for employees. Further, the number of employers choosing to offer CDHPs as the only available health care option is increasing. Employers are implementing initiatives to manage employee health, including on-site clinics, services and medications for the treatment of obesity, and common wellness programs, such as tobacco cessation. The various initiatives are designed to provide high quality health care as well as offer employees numerous programs designed to help them live a healthy life.