As we embark on the new year and take stock of corporate wellness goals and objectives, it’s worth taking a fresh look at employer healthcare costs in the past year, some of the steps employers are taking to control costs, and some of the the medical conditions that are driving those costs.
The Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2016 Employer Health Benefits Survey, released in September of 2016, is a key source of information on trends in employer healthcare costs and benefits, reporting in some detail on healthcare benefit plan trends, the impact of the Affordable Care Act, employee cost sharing trends, and more. For our purposes, we are looking at overall cost trends and the prevalence of corporate wellness programs as a mechanism to control those costs and improve employee health.
According to the survey, average annual workplace family health premiums were $18,142 in 2016, a 3% increase over the prior year. Premiums for single coverage now average $6,435 annually, of which workers contribute $1,129 on average.
While premiums continue rising each year, the report notes that, “We are seeing premiums rising at historically slow rates.” This is due in part to more employees moving into high deductible plans:
“In 2016, 29 percent of all workers were in such plans, up from 20 percent in 2014, while a shrinking share of workers (48% in 2016, down from 58% in 2014) are enrolled in Preferred Provider Organization (PPO) plans, which have higher-than-average premiums. These shifts effectively reduced the average premium increase by half a percentage point in each of the past two years, the analysis shows.”
Be sure to see the survey’s excellent accompanying interactive graphic which depicts premiums and worker contributions from 1999-2016.
Wellness program trends
The survey also cover trends in wellness, health risk assessment, biometric screenings and other programs that encourage employees to improve their health. Only employers who offer health benefits were surveyed on these questions.
Among the key corporate wellness trends:
- 46% of small firms and 83% of large firms offer a program in at least one of these areas: smoking cessation; weight management; behavioral or lifestyle coaching.
- 32% of small firms and 59% of large firms provide employees with an opportunity to complete a health risk assessment
- 20% of small firms and 53% of large firms offer employees the opportunity to complete biometric screenings
- 42% percent of large firms with a wellness programs offer employees a financial incentive to participate in or complete the program
Among large firms with incentives:
- 26% have a maximum financial incentive of less than $150
- 35% have a maximum incentive between $150 and $500
- 23% have a maximum incentive between $500 and $1,000
- 9% have a maximum incentive between $1,000 and $2,000
- 7% have a maximum incentive of $2000 or more
Report sheds light on medical conditions driving costs
This week, EBN (Employee Benefit News) looks at a recent analysis of the medical conditions that are driving employer healthcare costs. A JAMA analysis of 2013 healthcare costs showed that our of 155 medical conditions, only 20 accounted for half of all medical spending. Topping the list is diabetes, which has grown 36 times faster than the cost of heart disease, the leading cause of death in the U.S.
“These stark figures shed light on the rising healthcare costs that employers pay when addressing their workforce’s ailments.
According to Francois Millard, senior vice president and chief actuarial officer for Vitality Group, one of the study’s sponsors, this is the first study to dig into the details of the leading ailments of the U.S. and its costs to employers and families as they deal with the conditions.”
EBN lists the top 10 most costly expenses in 2013 as identified in the report:
2. Ischemic heart disease
3. Low back and neck pain
5. Injuries from falls
6. Depressive disorders
7. Oral-related problems
8. Vision and hearing problems
9. Skin-related problems, such as cellulitis and acne
10. Pregnancy and postpartum care