Employers Navigating Inflation Even as Benefits Plan Designs Stabilize

July 19, 2023

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Fourth Annual ‘Healthcare and Employee Benefits Benchmarking Survey’ Reveals Market Trends



Deerfield, IL (July 19, 2023) — A new study measuring employee benefits and human capital management challenges reveals that after navigating through a period of unprecedented upheaval, the nation is gradually returning to “business as usual.” Findings in the 2023 Healthcare and Employee Benefits Benchmarking Report published by Alera Group shed light on the persistent challenges related to healthcare and pharmacy affordability while offering signs of plan-design stability in the market.



The report also illustrates how employers are adopting strategic measures to address key drivers of healthcare utilization while offering benefits plans that help attract and retain high-caliber employees.



This is the fourth annual nationwide study commissioned by Alera Group to gauge employer perceptions, benefits offerings and strategies for overcoming human capital challenges. For this year’s survey, over 5,000 employers and almost one million employees were represented from companies across various sizes and industries, including manufacturing, construction, healthcare, retail and more. Key findings from the analysis include:



  • High-deductible health plans (HDHPs) decline in popularity: HDHPs are beneficial as they have a lower monthly premium and a higher deductible than traditional plans. However, only 29% of the plans survey participants offer are HDHPs. Preferred Provider Organization (PPO) plans are growing in popularity, as companies move away from HDHPs in favor of PPOs in part to help remove barriers to primary care.

  • Medical plan rate increases are more predictable: Sixty-four percent of unchanged plans compared with 2022 saw an 8% median increase. As the conditions most commonly targeted by employers’ disease-management programs, diabetes (91% participants), obesity (62% participants) and hypertension (73% participants) are still cost drivers of increases.

  • Pharmacy specialty tiers multiply: As pharmacy costs continue to skyrocket, more than half of survey respondents indicated that they now offer four or more tiers in their pharmacy plans. The vast majority of plans (87%) do not cover “new” drug therapies.

  • Size dictates funding approach: When it comes to employers' funding mechanisms, the survey reveals a disparity based on size. Smaller companies persist in fully funding their medical plans, while larger organizations lean toward self-insurance. However, intriguingly, the data indicates that self-insurance is not the overwhelming choice even among companies with over 1,000 lives, with only 62% opting for this approach.

“The results of this year’s survey reflect the continuing challenges of healthcare 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. “This survey will help employers to confidently plan ahead, addressing persistent employee benefits challenges and gaining insights into employee retention strategies and emerging trends.”



The aggregate report with a summary of key findings was released Thursday, July 20, 2023, at 1 p.m. CT during the How Benchmarking Can Change the Game for Your Benefits and Your Business webinar. To connect with a benchmarking expert who can answer your questions, contact your local Alera Group firm or email info@aleragroup.com.



 



About Alera Group     



Alera Group is an independent, national insurance and wealth services firm with more than $1.1 billion in annual revenue, offering comprehensive employee benefits, property and casualty insurance, retirement plan services and wealth services solutions to clients nationwide. By working collaboratively across specialties and geographies, Alera Group’s team of more than 4,000 professionals in more than 180 locations provides creative, competitive services that help ensure a client’s business and personal success. For more information, visit https://aleragroup.com/ or follow us on LinkedIn.