Our annual health benefits survey, with over 1,700 respondents in 2021, is one of the largest of its kind. It provides trends in cost and plan design and looks at employers’ strategies for managing cost and supporting employees -- and how they have responded to the pandemic.
With the pandemic disrupting health care utilization and adding stress to employees’ lives, employers are focusing on supporting behavioral health; developing future-focused strategies for virtual health care; and seeking new ways to engage employees whether they are at worksites or remote.
Health benefit cost jumped 6.3% in 2021, and although employers expect a more typical increase of 4.4% in 2022, a number of factors – higher utilization due to “catch-up” care, claims for long COVID, new extremely high-cost cellular drug therapies, and inflation in health care prices – could result in ongoing cost growth acceleration.
In today’s extremely tight labor market, generous health benefits can help tip the scales in attracting and retaining staff. That may help explain why, despite cost growth, employers are not shifting more cost responsibility to employees.
Nearly half of all employers with 500 or more employees – and about two-thirds of those with 20,000 or more employees – say that addressing health equity and the social determinants of health will be an important priority over the next 3‑5 years.
Adding or expanding programs to increase access to behavioral health care is a top-three priority for all employers with 500 or more employees (74% rated it is important or very important) – and it’s the number one priority for employers with 20,000 or more employees (86% rated it important or very important).
Employers are looking to virtual health care as a way to improve access without adding cost. With in-person health care severely limited during the worst of the pandemic, telemedicine got a boost: among employers with 500 or more employees, utilization rates had stagnated at 9% or less, on average, for many years; it jumped to 15% in 2020 and has held at 12% during the first half of 2021.
Despite a spike in health benefit cost growth in 2021, employers are not shifting cost to employees in 2022. Rather, they are focused on supporting their employees’ behavioral health; adding virtual health care solutions for greater convenience and personalization; and seeking new ways to engage employees whether they are at worksites or remote.
The 2020 survey report is still available
Consult with a Mercer expert on the National Survey findings and strategies for action.