Smaller health care cost increases have employers rethinking other benefits

Increasing health care costs has been an accepted fact of life for many employers. But while 2020 saw a surge in pandemic-related health care utilization, the decrease in utilization of care and deferral of elective procedures actually benefitted employers’ bottom lines. According to Mercer, large employers saw just a 1.9% increase in costs in 2020–the lowest increase in more than 20 years.

“The need to minimize exposure to the virus and ease the strain on overloaded health facilities caused many people to forgo care this past year, which translated to slower cost growth in 2020. Heading into 2021, that’s allowed employers to avoid cost management tactics like shifting cost to employees,” said Tracy Watts, a senior consultant at Mercer.

Related: Health care utilization and spending finishing the year lower because of pandemic

Unfortunately, the good news about health benefit spending is outweighed by complications and increasing risk in other areas of employees’ lives. As such, many employers are shifting the savings from their health benefits budget to address other areas of employee well-being.

“We’re seeing many focus on supporting employees with additional resources to help keep them engaged, productive and healthy during these tough times,” Watts added.

So where are they focusing their attention? Check out the infographic below:

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• Health care spending hits record high despite flat rates of utilization