Yes, the price of health insurance is still rising. But that’s no surprise. Companies have nervously anticipated that news annually for a long time. The good news—or as good as it gets—is that the rise in employer healthcare costs per employee has plateaued over the last few years.
According to the Society for Human Resource Management (SHRM), employer healthcare costs in 2019 are expected to only experience about a 6 percent hike from 2018. That’s certainly not inconsequential, but it roughly matches the year-to-year increases from the previous five years. Over that period the annual rate boost has ranged between about 5.5 percent and 7 percent. It’s been worse.
SHRM also reports that the average cost of employer-provided health insurance in 2019, including employee contributions and out-of-pocket costs, will reach nearly $15,000. Employer healthcare costs per employee will be about 70 percent of that total, or some $10,400 per worker.
So the good news is somewhat limited, but business leaders must make the most of whatever positive trends can be found in this critical cost category. What else can employers do to their healthcare costs?
Strategies for Reducing Employer Healthcare Costs
And that’s the question CEOs, benefits managers, and business owners are asking themselves—what else can they do? As the average cost of employer-provided health insurance in 2019 is likely to continue to rise, though at more manageable levels than in previous years, organizations must look at all options to hold down costs as much as possible. They are in search of innovative healthcare cost management solutions.
After all, while a 6 percent increase is not anywhere as dramatic as some seen in the past, it’s still as much as three times the rate of inflation. That means that businesses probably won’t be able to raise the price of their products or services to cover the increased expense. And employees aren’t likely to get raises that offset the paycheck shock.
Below are some common ways in which employers are reducing their healthcare costs for 2019:
Boosting employee contributions. It’s an idea—though not necessarily a good one. It’s always a high-risk move to shift the burden of cost to valued workers, and this is especially true when the economy is humming and they have a buyers’ market of employment options. Besides, increasing employee healthcare premiums is about as good for morale as salary cuts during bad times.
Adding high-deductible plans to the menu. Th