Health program trends reflect a complex business environment


Employers will be challenged to absorb higher cost increases, but with inflation putting stress on their employees’ household finances, budget concerns must be balanced with healthcare affordability and the need to offer attractive benefits. The focus now is on strategies to rein in cost growth without shifting more cost to employees.

Health benefit cost growth ahead


Health benefit cost per employee rose 3.2% on average in 2022 – but an average increase of 5.4% is expected for 2023. It is likely that benefit cost growth will continue to accelerate as multi-year health plan contracts are renewed and begin to reflect inflation-driven cost increases.

A&R considerations 


 Health benefit costs may be on the rise, but employers continue to face a tight labor market and are well aware that healthcare benefits weigh heavily in employment decisions. This year, “enhancing benefits to improve attraction and retention” was the top strategic priority, rather than cost-cutting measures.

 Steering to high-value care


More than a third of very large employers (36% of those with 20,000 or more employees) offer a telephonic healthcare navigation or advocacy service to help members find the right provider based on quality and cost, and 17% offer a digital navigation tool.

Specialty drugs


Large employers reported that spending on specialty drugs rose by nearly 10% in 2022, and still higher increases are expected as more breakthrough gene and cellular therapies enter the market. Over a third of large employers (34%) say they will add or enhance stop-loss protection in anticipation of an increase in very large claims.

Behavioral health a priority


Many employers – especially very large employers – are prioritizing mental health in their program strategies. Some are taking steps to reduce stigma: A Mercer survey conducted earlier this year found more than a third of large employers are training managers to recognize behavioral health issues and direct employees to existing resources.

Explore the findings

Health benefit cost

Average per employee cost Average per employee cost

Employer strategies Employer strategies

Navigation and advocacy services Navigation and advocacy services

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