Amid rising inflation, employers structuring benefits plan designs

Primary concern for employers is managing the economic impacts of inflation and providing employees the benefits they need to withstand rough economic times. Many employers have adopted specific practices that address health care utilization and offer benefits plans that attract and retain high quality employees.

Preferred Provider Organization (PPO) plans are growing in popularity, as companies look to remove as many barriers to primary care as possible, according to the 2023 Healthcare and Employee Benefits Benchmarking Report. To contrast, high-deductible health plans (HDHP’s) have declined in popularity. With a lower monthly premium and a higher deductible, the survey found only 29% of participants offer HDHP’s.

As pharmacy prices follow the upward rising trend, more than half of employer respondents confirmed that they offer four or more tiers within their pharmacy plans. The survey noted that the vast majority of plans (87%) do not cover “new” drug therapies.

When it comes to employers’ funding approaches, the survey reveals a difference based on the size of the firm. Smaller companies continue to fully fund their medical plans, while larger organizations typically lean toward self-insurance. Interestingly enough, however, data indicates that self-insurance is not the overwhelming favorite among these large companies, with only 62% opting for this choice.

“The results of this year’s survey reflect the continuing challenges of health care and pharmacy affordability but also show reassuring signs of plan-design stability after years of constant disruption,” said Sally Prather, executive vice president and employee benefits practice leader at Alera Group.

Related: How small business owners can craft the right benefits package

“This survey will help employers to confidently plan ahead, addressing persistent employee benefits challenges and gaining insights into employee retention strategies and emerging trends.”