Employers grapple with rising healthcare costs while prioritizing employee well-being, a Willis Towers Watson (WTW) report notes. As 69% of U.S. employers focus on managing healthcare expenses, strategies to navigate this challenge are multifaceted. Courtney Stubblefield, WTW’s Managing Director of Health and Benefits, emphasizes the complexity each employer faces in balancing costs and comprehensive healthcare for their workforce. To combat these costs, various approaches are being considered. While 37% of employers are currently implementing cost-cutting programs, 50% intend to do so in the next two years. A substantial number also plan to bid out vendor/health plans (47%) to optimize their health benefit expenses.
Projections indicate a 6.4% increase in healthcare plan costs by 2024. Differing forecasts from Aon, the International Foundation of Employee Benefit Plans (IFEBP), and KFF suggest varied percentages, with Aon estimating an 8.5% hike to over $15,000 per employee.
Employers are directing efforts towards enhancing mental health and emotional well-being programs (63%), prioritizing this over other facets like employee experience, communication, diversity, equity, and inclusion. Strategies to curtail health benefit expenses include offering a narrow network of quality, cost-effective providers (24%), utilizing health plan centres of excellence (19%), and carving out speciality pharmacy services (16%).
Moreover, employers are emphasizing the importance of mental health, drugs, and virtual care within their benefit offerings. Initiatives such as transitioning to biosimilars (27%), evaluating speciality drug costs (26%), and offering virtual primary care (18%) are on the radar. Concern for mental health in the workplace has surged, with employers engaging employee resource groups (48%) and conducting mental health parity audits (53%) to address these issues. Beth Umland, Mercer’s Health Research Director, emphasizes a careful approach to enhancing benefits—focusing on inclusivity and employee feedback, especially concerning mental health support. This aligns with the growing concern—mental health needs in the workplace escalated by 33% since 2022, demanding a thoughtful and value-oriented approach from employers.
