Employers Committed to Offering Health Care Benefits

Health care costs expected to increase 5.9% in 2012, but benefit offerings will begin to shrink. A recent survey conducted by Towers Watson which measured the likelihood of employers continuing offering a sponsored health plan brought about some interesting results. 

The survey polled 368 midsize companies regarding their current plan and what changes they plan to make in 2012.

Some of the eye-opening results include: 

• 29% are unsure if they will continue sponsorship of a health plan
• 45% will rethink their health care strategy in 2012 
• 54% will discontinue benefits to both pre-65 and post-65 retirees 

The survey also found that while employer health care costs will rise at a noticeably lower rate during 2012 compared with 2011 (5.9% versus 7.6%, respectively), the vast majority of employers (88%) are planning to take steps to control their costs and avoid the impact of health care reform's excise tax. 

Roughly half (45%) will rethink their long-term health care strategy during 2012, and many are uncertain how they will respond to the looming impact of state-based insurance Exchanges in 2014.

If your company is not thinking like the 88% that are taking steps to control costs without cutting benefits completely out - pick up the phone and call Health Benefits US Inc today - or drop us an email.   

It is not too late to get it right for 2012!

What’s Driving Health Care increases for America's Companies?

This analysis points to several factors. First, employers continue to experience an increase in the quantity and cost of catastrophic claims, as slower levels of hiring have resulted in slightly older workforces who are more prone to costly medical conditions.

Also, generally poorer health – leading to increases in costly conditions such as diabetes and heart disease – make it difficult for employers to deploy tactics that drive short-term cost savings.


As a result, employers continue to ask employees to absorb increases through a combination of out-of-pocket cost and increased payroll contributions.

Furthermore, against this backdrop, employers are focused on ways to mitigate these “unhealthy” trends over both short- and long-term, while awaiting further regulations related to health care reform. “In addition to sharing costs with employees, organizations are implementing more aggressive ‘incentive’ strategies to get [workers] to understand, and manage, their health,” noted Jim Winkler, large market segment leader with the health & benefits practice at Aon Hewitt.

“Some employers are adopting the mindset that says, ‘if you are going to spend a lot of house money, you need to play by house rules,’ including completing a health-risk questionnaire, participating in prevention and wellness plans, and better managing chronic conditions,” he added.

At the end of the day, however, companies and workers alike are facing big dollar hikes in terms of health care costs – and that sure doesn’t help the bottom line of any industry, much less those involved in the trucking business “In what continues to be an uncertain economic environment, organizations cannot afford health care costs growing at 7% each year,” noted John Zern, executive vice president and practice director for health & benefits-the Americas, for Aon Hewitt.

“While health care reform continues to represent potential systemic change in a few years, employers will continue to shift cost to employees in order to keep company costs to a manageable level,” he added.