Good morning!
You didn’t imagine it—the cost of health care benefits is increasing and will likely get more expensive as the year progresses.
New data from Mercer finds health care costs are expected to rise by 5.4% this year due to wage increases and higher supply costs.
Many employers (46%) say they intend to eat the added cost because offering enhanced benefits remains their top strategy to attract and retain qualified talent.
Just 3% of leaders at large companies say they plan to raise employee cost-sharing in 2023, Fortune's Paige McGlauflin reports in a piece detailing how employers can accommodate the cost increase without transferring it to employees. Here’s an excerpt from her:
“‘We’ve seen that over the course of the pandemic, large employers have mostly avoided shifting costs to employees by raising deductibles, co-pays, and out-of-pocket limits,’ says Beth Umland, director of employer research for health and benefits at Mercer. While that could change as employers prepare for accelerated health care costs, ‘these new results suggest that cost shifting is still going to be used more as a last resort than the go-to cost management strategy.'
Interestingly, Mercer found that employers are actually providing more affordable options to employees. Fifteen percent offer free employee coverage for at least one medical plan, and 18% use salary-based contributions. Thirty-nine percent of employers offer medical plans with no or low deductibles, and 6% make larger HSA contributions for low earners.”
Read the full story here and learn the top cost-saving strategies employers are deploying in the coming year.
Amber Burton
amber.burton@fortune.com
@amberbburton
