Including premiums and out-of-pocket costs for employees and dependents, the total cost of healthcare is estimated to average $14,769 per employee this year—an increase of $197 from last year.
By HR Daily Advisor Editorial Staff Private Duty
Large employers plan to expand virtual care offered to employees next year as well as double down on mental health and emotional well-being as they continue to address the COVID-19 pandemic, according to an annual survey by Business Group on Health (BGH). While the pandemic's impact is fueling uncertainty about overall costs, respondents to the "2021 Large Employers' Health Care Strategy and Plan Design Survey" expect the total cost of health benefits to rise 5.3% in 2021, taking cost management initiatives into account. The increase is slightly higher than the 5% increases employers projected in each of the last 5 years.
Including premiums and out-of-pocket costs for employees and dependents, the total cost of health care is estimated to average $14,769 per employee this year—an increase of $197 from last year—and is projected to rise just over $15,500 in 2021. In line with recent years, employers will cover nearly 70% of costs while employees will bear about 30%, or nearly $4,700.
"Health care costs are a moving target and one that employers continue to keep a close eye on," says Ellen Kelsay, BGH president and chief executive officer. "The pandemic has triggered delays in both preventive and elective care, which could mean the projected trend for this year may turn out to be too high. If care returns to normal levels in 2021, the projected trend for next year may prove to be too low. It's difficult to know where cost increases will land."
The exponential growth in virtual care is one of the major trends identified in the survey, some of which is being fueled by the pandemic. Eight in 10 respondents believe virtual health will play a significant role in how care is delivered in the future, a sharp increase from 64% last year and 52% in 2018. More than half of respondents (52%) will offer more virtual care options next year.
Nearly all employers will offer telehealth coverage for minor, acute services while 91% will offer it for mental health services, a number that could grow to 96% by 2023. Virtual care for musculoskeletal management shows the greatest potential for growth. While 29% will offer musculoskeletal management virtually next year, another 39% are considering adding it by 2023. Employers are also expanding other virtual services including the delivery of health coaching and emotional well-being support. These offerings are expected to increase in the next few years.
Mental Health Services
Another key trend for employer plans in 2021 is the expansion of access to virtual mental health and emotional well-being services to address provider shortages, minimize wait times, and reduce the stigma associated with seeking care. More than two-thirds of respondents (69%) provide access to online mental health support resources such as apps, videos, and articles, and a full 88% of respondents plan to do so in 2021.
Expanded virtual options are not the only steps employers are taking to bolster mental health services. Nearly half (47%) of respondents provide manager training to help recognize mental and behavioral health issues and direct employees to services. Another 18% plan to do so in 2021, and half of respondents indicated they will conduct anti-stigma campaigns in 2021.
Employers are also helping to address cost barriers by reducing out-of-pocket costs for mental health services. More than half (54%) are lowering or waiving costs for virtual mental health services in 2021. More than a quarter (27%) will reduce the cost of counseling services at the worksite, bolstering the trend of bringing services directly to employees.
"Employers were already prioritizing mental health and emotional well-being before the pandemic hit," Kelsay says. "Now it's a significant crisis. In addition to those individuals with pre-existing mental health needs, many more employees and family members are now dealing with anxiety, stress or loneliness. We expect employers will boost their investment in programs that support employees' mental health and emotional well-being."
The survey also found the following:
- More employers are linking health care with workforce strategy. The number of employers that view their healthcare strategy as an integral part of their workforce strategy increased from 36% in 2019 to 45% this year.
- On-site clinics continue to grow. Nearly three in four respondents (72%) either have a clinic in place or will by 2023. Some employers are expanding services—34% offer primary care services at the worksite, and an additional 26% plan to have this service available by 2023.
- Growing interest in advanced primary care strategies. More than half of respondents (51%) will have at least one advanced primary care strategy next year, up from 46% in 2020. These primary care arrangements, which move toward patient-centered population health management emphasizing prevention, chronic disease management, mental health and whole person care, are key focus areas for employers.
- Employers remain concerned about high-cost drug therapies. Two-thirds of respondents (67%) cited the impact of new million-dollar treatments as their top pharmacy benefits management concern.
The "2021 Large Employers' Health Care Strategy and Plan Design Survey" was conducted between May and June 2020. A total of 122 large employers participated. Collectively, respondents represent a wide range of industry sectors and offer coverage to more than 9.2 million employees and their dependents.
“In addition to those individuals with pre-existing mental health needs, many more employees and family members are now dealing with anxiety, stress or loneliness.”
Ellen Kelsay, President / CEO, BGH
In line with recent years, employers will cover nearly 70% of costs while employees will bear about 30%, or nearly $4,700.
The number of employers that view their healthcare strategy as an integral part of their workforce strategy increased from 36% in 2019 to 45% this year.
Two-thirds of respondents (67%) cited the impact of new million-dollar treatments as their top pharmacy benefits management concern.