U.S. employers must brace for healthcare cost increases at more than 5% for next year “and beyond,” according to the latest report from the employee benefits consultancy Mercer.

Next year’s rise in employer-paid health insurance premiums comes after a much lower rate increase this year of 3.2%, new data from Mercer shows. And next year’s coming increase is almost as much as the 6.2% spike in 2021 that was largely due to individuals catching “up on healthcare needs delayed as a result of the pandemic,” Mercer said.

Sponsored

The return to what Mercer analysts say is a more “normal trend” is still well below general inflation that has been averaging 8% this year, but it could be a sign of healthcare inflation rising in coming years, Mercer analysts say.

“One reason cost growth lagged inflation this year is because healthcare providers typically have multi-year contracts with health plans,” said Sunit Patel, Chief Health Actuary at Mercer. “So although employers did not feel the full brunt of inflation immediately, it’s very likely that inflation-driven cost increases will phase in over the next few years as contracts are renewed.”

This year’s total health benefit cost per worker hit $15,013 on average, Mercer said, “with small organizations (50-499 employees) reporting slightly higher costs than large organizations (500 or more employees),” Mercer’s analysis shows.

Though it varies from employer to employer, an employee’s share of the total cost is about 22% for large employers with 500 or more employees. Thus, workers at such large employers are paying premiums deducted from their paychecks of about $3,300 or more annually based on Mercer data.

The data for Mercer’s national survey of employer-sponsored health plan comes from more than 2,000 public and private employers that employ 124 million full and part-time workers.

Sponsored

Leave a Reply

Your email address will not be published. Required fields are marked *