Workplace

October 1, 2013

Employers’ cost increases for 2014 employee health insurance forecast at 4.8 percent

Consumers may not feel that health care insurance costs are under control, but a preliminary survey by the Mercer consultancy, released Tuesday, projects the third straight year of 5 percent-or-under cost increases for employers who offer plans.

Consumers may not feel that health care insurance costs are under control, but a leading indicator projects the third straight year of 5 percent-or-under cost increases for employers who offer plans.

A preliminary survey by the Mercer consultancy, released Tuesday, finds that employers’ average health benefit costs per employee are expected to rise by 4.8 percent in 2014.

Part of the relatively slow cost increase for employers stems from their having revamped their plans. If they made no changes, their costs would rise by 7 percent, Mercer said.

The survey also noted the unknowns associated with implementation of the Affordable Care Act. About half of the employers in the survey expect additional costs from rising enrollments and new fees imposed by Obamacare.

Mercer cautioned that the projections are preliminary and that actual cost growth may differ. Meanwhile, it seemed apparent that 2014 health insurance costs to employers would rise more than the 4.1 percent cost increase for 2012.

The increase for employers in 2013, still to be made final, is expected to be 5 percent.

One factor that will increase some large employers’ costs is the Affordable Care Act requirement that they offer coverage to employees who work 30 or more hours a week.

The Mercer report said about a third of large employers — with 500 or more employees — do not currently offer coverage to all employees working 30 or more hours a week. Thus, industries with a heavy share of part-time workers “will be the hardest hit by this rule,” Mercer said.

The Mercer survey found 5 percent of large employers expecting to end their health care plans for employees in the next five years.

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