Mercer Leaders Weigh In on 2019 Health Benefit Trends
Bill Gates said most people overestimate what they can do in one year and underestimate what they can do in ten. But when it comes to thinking about change, sometimes the reverse seems true – it’s hard to imagine just how much can change in just one year. To help with the big picture, we canvassed our Mercer thought leaders to get their predictions for employer health programs for the coming year. Here, in no particular order, are the first 10 we received. Check back next week for the rest.
AI everywhere! Healthcare will be the next industry to be transformed by AI. We’ll see more investment, more startups, and more traditional healthcare players diving into AI in 2019. Some of the seemingly infinite number of applications that may bubble to the top include AI-driven diagnoses on digital platforms, AI-informed patient triage recommendations to appropriate care settings, AI applied to health plan and provider customer service, and AI-driven recommendations for health-related purchases in retail settings.
Account-based plans create buzz. 2018 saw exciting regulatory and legislative proposals for account-based plans: Employers soon may be able to offer a Health Reimbursement Arrangement for purchasing individual coverage to employees who do not receive an offer of employment-based coverage, and legislative proposals have been introduced that would expand opportunities for employees to contribute to Health Savings Accounts. Final rules on HRAs and action on HSA expansion will create a lot of buzz in 2019, but the complexity of the rules, administrative challenges and delayed effective dates will push real change off into future years.
Wade A. Symons, JD, CEBS -- Regulatory Resources Group
Personalization of health care. As consumers demand a more tailored experience, they will be increasingly more comfortable with sharing their own data, leading to smarter use of AI, targeted support, and information that is meaningful to an individual delivered in an actionable way.
Scott Rabin – Data, Technology and Analytics
Value on investment. The new yardstick for benefits will be how they affect employees’ perception of their employer. Benefits that make an employer a “best place to work” will be seen by HR as worth more than they cost. The key is providing the benefits that each population segment (low wage, senior, etc.) will value.
Kristin Parker – Total Health Management
Transparency in Rx pricing. Aggressive change in pharmacy management is bringing greater transparency: A better line of sight into PBM acquisition costs and new pricing approaches – net cost models, point-of-sale rebates, removing rebates from the equation in lieu of other financial incentives, and focusing on outcomes, to name a few. While it may be positive change, all of this, combined with the vertical vendor integration taking place, employers can expect administrative and operational challenges over the next few years.
Lisa Oswald – Performance Audit Group
Getting family-friendly fast. State and local laws, the war for talent, and changing social expectations will lead employers to implement or enhance paid parental leave programs and to consider adding a paid “care giver” leave for incidental family-related absences. State and local statutory paid leave requirements may snowball in the coming years, and employers will be taking a closer look at how their leave management /time off strategies impact productivity and compliance.
Simon Camaj, Life, Absence and Disability
Extreme claims get real. A number of factors are driving an increase in both the prevalence and the size of extreme claims, and 2019 will be the year these black swans start to appear with greater frequency. What’s harder to predict is what the employer response will be. Will they pay these ongoing jumbo claims and move on? Or will they take action?
Rich Fuerstenberg – Life, Absence and Disability
More stop loss. With the severity and frequency of catastrophic claims, employers will up their stop loss insurance levels and those that don’t buy it now will reconsider. We’ll see growing interest in alternative funding options, such as single parent captives and group captives, and carrier consolidation to create the scale necessary to handle the volume of catastrophic claims. Carriers will more closely scrutinize charges and payment practices of major medical carriers and PBMs.
Dan Davey – Stop Loss Center of Excellence
More outsourcing. HR and health and wellbeing functions will increasingly be outsourced to create efficiencies and reduce headcount. Think outsourced onsite clinics, outsourced benefits administration, and the outsourcing of well-being program support staff to vendors.
Kristin Parker – Total Health Management
Midsized employers doing something really different. While jumbo employers are typically the trailblazers, this year midsized employers will take the lead with a couple of truly radical benefit strategies: Reference-based pricing solutions as a replacement for traditional open access broad network solutions; and swapping traditional employer-sponsored plans for Health Reimbursement Accounts that employees use to shop for coverage on the individual market.
Tyler Harshey – Actuarial and Financial Group