Dive Brief:
- Despite already modifying their benefit plans last year, employers expect their healthcare costs to rise again in 2016, requiring additional changes, according to a survey released yesterday by Wells Fargo Insurance.
- Fifty-eight percent of employers surveyed expect their medical plan costs to exceed the thresholds for the Affordable Care Act (ACA) excise tax, also called the “Cadillac” tax, which was originally to take effect in 2018, but has been delayed until 2020.
- Additionally, 70% of employers expect their budgets for benefit plans to increase, as human capital and health and productivity remain key issues for businesses to manage.
Dive Insight:
Well's Fargo's Employee Benefits Trend Study, which surveyed more than 650 middle-market companies and large corporations, found that as employers balance business goals with controlling cost, they are also exploring additional changes to their plans to avoid the Cadillac Tax.
Half of the employers in the study said they will continue to make changes to their plans either this year or in 2017 by adding a high deductible plan option (52%), increasing the employee contribution percentage (56%) or increasing co-insurance features (55%).
The survey found that as an employee engagement strategy, employers are taking a multi-pronged approach by adding incentives or penalties and increasing health and wellness offerings. Fifty one percent of companies expect to increase wellness offerings and 37% will add wellness incentives or penalties to their programs in 2016. Also, 91% of C-suite respondents said improving the health of employees is important as it correlates with lower medical costs, reduced absenteeism and increased productivity.
