ARLINGTON VA, October 6, 2021 – U.S. employers are prioritizing healthcare affordability and employee wellbeing over the next two years as health benefit costs are expected to increase by more than 5% and worries over the impact of the pandemic linger. That’s according to a new survey by Willis Towers Watson, a leading global advisory, broking and solutions company (NASDAQ; WLTW).
Employers expect their costs for medical and pharmacy benefit expenses to increase 5.2% in 2022, even after taking cost management initiatives into account. The increase is slightly lower than the 5.5% increase employers projected for 2021 but sharply higher than the actual 2.1% increase in 2020. Last year’s increase was the smallest in decades and is seen as an anomaly as many people deferred non-emergency care and rapidly embraced telemedicine during the pandemic. With 86% of employers prioritizing employee affordability, employers will take different approaches regarding absorbing a portion of the cost increases or reflecting these fully in the employee cost share.
Survey respondents were asked to identify their key priorities over the next two years. Here are their responses:
|Key priority over the next two years
|Achieve affordable and sustainable costs for organization
|Achieve affordable costs for employees, especially lower wage employees
|Enhance employee wellbeing
|Identify programs that support diversity, equity and inclusion goals and social determinants of health
“Rising costs and increased utilization fueled by a resurgence in deferred care are driving employers to find new ways to control costs while providing employees with affordable, high-quality care,” said Julie Stone, managing director, Health and Benefits, Willis Towers Watson. “COVID-19 accelerated both provider adoption and employee acceptance of telemedicine and virtual care. Employers see continued use of virtual care as integral to sustaining improvements made in access, quality and cost management. At the same time, employers must now address the Delta variant, encouraging workers to access the care and support they need while grappling with rapidly evolving conditions.”
The survey identified several measures employers are taking to address affordability, benefit designs and network management issues, including:
Employee physical and emotional health has been hit hard by the pandemic, driving employers to invest heavily to support wellbeing and find new ways to boost the employee experience. Nearly half of employers (45%) are leveraging wellbeing vendors to help enhance the employee experience across physical, financial, emotional and social wellbeing; another 37% are planning or considering doing so in the next two years. Additionally, 52% are enhancing the enrollment experience, with 34% planning or considering doing so. And, 49% are adding more choices in all benefits; another 23% are planning or considering doing so.
“As employers update their ways of working, they are finding a challenging environment to attract and retain employees. Those employers that take action to keep their healthcare benefits affordable and easily accessible, strengthen the wellbeing of their workers and build a better employee experience will gain advantages in the future — namely a more healthy, satisfied and productive workforce,” said Jeff Levin-Scherz, MD, Population Health leader, Willis Towers Watson.
A total of 378 U.S. employers participated in the Willis Towers Watson 2021 Best Practices in Health Care Survey, which was conducted during June and July 2021. Respondents employ 5.9 million workers.
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.