Growth in Health Benefit Costs Slowing, Mercer Survey Shows

The latest annual survey pegged the growth at 6.1 percent this year, down from 6.9 percent in 2009, with a projected 5.7 percent increase projected next year.

The upward spiral of employers' spending on health benefits for their workers is beginning to slow down, according to Mercer's 2011 National Survey of Employer-Sponsored Health Plans. The company released its results Nov. 16 and said 2,844 public and private employers with 10 or more workers participated.

"In a tough economy where high benefit costs increases often have to be balanced with lower pay increases, cost management is already important. But given the new cost pressure from health reform, for many employers it's becoming an imperative," said Susan Connolly, a partner in Mercer's Boston office.

The survey asked participants about some elements in the health care reform law that is being challenged by several states, including in appealed cases to be heard by the U.S. Supreme Court early next year. The provision that concerns employers the most is an excise tax on high-cost plans; nearly half of the survey's respondents called it a significant or very significant concern, and most said they will attempt to lower their costs to avoid paying it, according to Mercer.

"Employers that are concerned about a jump in enrollment in 2014 or the excise tax in 2018 see a need to slow cost growth now," said Beth Umland, Mercer's director of research for health and benefits. "While the cost shifting to employees is going on, this year we saw more employers adopting strategies they believe will provide better results over the long haul."

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