With health insurance reforms instituted by the Affordable Care Act (ACA), employers have expressed concern over healthcare costs. In fact, a 2016 AFLAC poll found that 42% of employers were most concerned with the rising cost of employee benefits plans versus other costs. While the positive news is that the growth of healthcare costs is predicted to stay at a steady 6.5%, employers are not necessarily raising wages enough to accommodate this growth. A report from the Commonwealth Fund shows that employee contributions are up since the passage of ACA (see figure below).
Additionally, employers will have to face the Cadillac Tax in 2020. This tax is meant to discourage companies from offering high-cost plans to their employees. It taxes employers at 40% of the cost of the plan if the plan costs more than $10,200 for individual coverage, and $27,500 family coverage. In response, companies are looking for ways to cut healthcare costs, and total plan costs to stay under this threshold.
Reducing healthcare costs
Interestingly, the response varies by size of the company. While smaller companies have primarily focused on healthcare plans and contributions, mid-sized companies and larger companies have implement wellness programs. In fact, this has been the most popular option for large companies. Approximately 44% of large companies have added a wellness program. Wellness programs, aside from their proven return on investment, are also extremely popular with employees. Among various types of programs, exercise programs had the highest percentage of employee interest. In other words, combating the rising healthcare costs doesn’t mean employers have to lower health care coverage or raise wages; instead, they can promote overall wellness by participating in emerging wellness initiatives. To find out how we here at IncentFit can help you reduce these costs, schedule a phone call with one of our team members!