Mercer is offering health care spending junkies a sneak preview at data still in the development stage. The news looks good — employers are again reporting that they’re improving their containment of health care costs as a corporate line item.

Here are the highlights from this large-scale survey of U.S. corporations:

  • After plan design alterations, employers say they expect an average cost increase of 4.2 percent;

  • This marks the fifth straight year employers have kept cost increases under an informal target of 5 percent;

  • Consensus is building around the use of consumer-directed plans remain to avoid paying the so-called Cadillac tax.

The news about the cost estimate is especially buoying because the actual 2014 increase as reported by employers was slightly less than 4 percent.

And there’s more good news: Employers reported that, if they made no design changes, the increase would be about 6.4 percent — down from 7.1 percent for 2015 “and ... the lowest rate of underlying cost growth seen since Mercer began collecting this information in 2005.”

No wonder Mercer wanted to leak the results early.

“While health benefit cost growth is still well above CPI, the good news — for employers and employees — is that employers don’t have to trim as much to get cost increases to a more reasonable level,” says Tracy Watts, senior partner and Mercer’s National Health Reform Leader.

The survey found that 54 percent of employers will continue to tinker with plan design to keep their focus on cost containment. Such action can only help if and when the excise tax on “rich” employer sponsored plans — the Cadillac tax — takes effect in 2018.

Another highlight: 42 percent said they intend to add or expand wellness programs next year.

“It may be tough to measure, but a lot of employers believe investments in programs to improve employee health have paid off in medical plan savings,” says Beth Umland, Mercer’s Director of Research for Health and Benefits. “While there are many opinions about why we’re seeing a slow-down in benefit cost growth nationally, efforts to educate, engage and support employees in improving their health should make every employers’ to-do list.”

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.

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