Employer Health Benefits Costs Are Going Up in 2020 (and How to Stay Ahead) - Zupnick Associates

 It’s not too surprising that employer health benefits costs are on the rise again. Typically costs inflate to about 3.8% every year.

The kicker is that in 2020, employers can expect to see their benefits costs increase to a whopping 6.5% according to Aon plc. report 2020 Global Medical Trend Rates Report. 

Why the Huge Increase in Employer Health Benefits Costs in 2020?

The rising benefits costs are justified by higher costs of prescription drugs and a spike in healthcare costs in general. Routine health exam prices are expected to increase because of the decrease in health care utilization. 

According to the Aon report, there’s been an increase in claims related to cancer, diabetes, and high blood pressure. Obesity is also on the list of growing claims, as well as lifestyle-related illnesses like poor nutrition, alcohol abuse, and other substance abuse. 

So, as you can see, chronic conditions are leading the pack when it comes to increased medical costs. These are conditions that often need long-term treatment plans and are challenging to treat. 

What Can You Do to Combat the Rise in Employer Health Benefits Cost in 2020?

Empower Your Employees

People spend most of their time in the workplace, so employers should focus their efforts on changing the culture amongst their workforce. 

Supporting those with chronic conditions by providing education may help offset the costs of the increase in health benefits costs. 

Provide Wellness Support

Encouraging employees to take their healthcare management seriously by providing wellness activities and community challenges can help employees feel like they have the power to make healthy changes. It also shows your employees that you care about their health and well-being. Which can also help your company’s public image. 

Stay on top of Wellness Trends

Virtual solutions are at the forefront of ways employers are looking to head off the rising health benefits costs. 

More than ever, healthcare providers are caring for patients virtually. Routine visits or minor illnesses can often be addressed via the internet. 

Employers are encouraging their workforce to utilize these kinds of care practices, especially since many of them can be paid for with HSAs. 

Become Familiar with Preventative Care

Healthcare is confusing, and if you don’t have the training to understand it well, you’re going to miss out on potential benefits for employees. 

Unfortunately, many people don’t understand that preventative care is often covered by insurance. 

In general, people are reactive and not preventative about their health. So spending the time to educate your employees on utilizing preventative care can be an excellent way to combat the rising health benefits costs in 2020, and keep your workforce healthy.

Stay Knowledgeable About Health Benefits costs in 2020 and Beyond

New laws, policies, and offerings surface all the time. Not just during open enrollment. 

Employers and lawmakers are always looking for a way to improve upon broken systems. If you know what’s going on in the world of health insurance, you can keep your employees updated, and offer them more options. 

Researching upcoming changes is extremely important, and frequently checking websites like SHRM is a great way to stay ahead of rising health benefits costs in 2020.

Spreading the Good News About ICHRA

Individual Coverage Health Reimbursement Arrangement (ICHRA) is an excellent way for you to provide health benefits to the workforce.

Starting in January 2020, ICHRA will be showing up on the employer healthcare scene. It is a program that reimburses employees (tax-free) for individual health insurance that they purchase on their own and is not obtained through the employer. 

ICHRA works like this:

  1. The company decides on an allowance

  2. Employees purchase healthcare

  3. Employee submits their proof of expenses

  4. The company approves and reimburses the employee

An ICHRA is very similar to HSA’s and the 2017 QSHERA, but it allows for more flexibility for employers.

The only drawback, at this point, is the administrative aspect of ICHRA. When employees submit their receipts, it can become a bookkeeping nightmare for HR staff. 

Many human resources professionals opt to utilize software systems to streamline the process and keep everything in one place for submitting, reviewing, and reimbursing employees.

All-in-all the rise in employer health benefits costs is not all bad news. There’s ICHRA in the works, and plenty of opportunities to empower your employees.

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