Employer health insurance plan costs are set to spike for next year. All the experts are in agreement on that point. The only question is just how much higher coverage will cost.
Employee benefits consulting firms Mercer and Willis Towers Watson expect companies’ plans will surge by 6.5% in 2024. Health insurance costs last increased by that much in 2013.
Looking for a better outlook? Professional services firm Aon says an 8.5% increase is on the horizon. In dollars and cents terms, that’s about $15,000 per year to cover an employee in 2024, about $400 more than the current average.
Petersen-KFF Health Tracker predicts the median increase will be 6%. But employers that only see a 6% spike in plan costs should breathe a sigh of relief: HealthTracker also says some employers will be paying as much as 10% more to insure workers.
Employers aren’t the only ones getting squeezed by inflation. Individuals covered under Obamacare will also see 6% average increases.
The Wall Street Journal says the factors driving up costs are “hospitals’ higher labor costs and heavy demand for new and expensive diabetes and obesity drugs. The employer-plan increases are expected to strike businesses of all sizes, and regardless of whether they rely on an insurer to handle their health coverage or are self-insured.”
Proactive steps employees can take now
Most employers will be sizing up health plans and costs before open enrollment begins in early fall. Minimizing the bottom-line cost will be priority No. 1 for businesses already squeezed tight by inflation and high interest rates.
Employees will be sure to grumble about changes to their plans, and they definitely won’t like having to pay more for health insurance. But at the very least, they’ll appreciate an early heads-up from their companies’ benefits or finance departments.
And there are a few steps employees can take now to alleviate costs for 2024:
- Get in shape (or “even better” shape). Employees can take advantage of weight loss and gym attendance rebates that pretty much every health plan sponsor is offering now. Those dollars saved by getting in shape can help alleviate out-of-pocket costs for co-pays and medications.
- Move co-dependents to other plans (if possible). Spouses and dependents under age 26 who are working may be eligible for coverage from their employers. Now’s a perfect time for employees to review other health coverage that may be available and calculate potential savings.
- Put more money into health savings accounts. Remind employees that income directed toward an HSA account is all pre-tax. So for every dollar spent on health and wellness, the actual value is $1.33 (give or take a few cents).