Healthcare costs rising for employers: Here’s help

The cost of everything’s projected to go up next year – including the healthcare plans you fund for your employees. A recent analysis from Aon can give you an idea of just how much you should expect to shell out for health coverage in 2023.

Healthcare costs are expected to increase an average of 6.5% to over $13,800 per employee next year between employer and employee expenditures, according to Aon.

The current cost per employee is $13,020 – of which $10,500 is employer cost. In 2022, employer healthcare costs increased 3.7% from 2021. Employers pay an average of 81% of the plan’s costs. (Employees cover the rest, typically via paycheck deductions.)

Various factors are projected to impact healthcare costs next year, including the continuing rise in medical claims when compared to the first part of the COVID-19 pandemic, since more people are now seeking out routine health care they may have put off during lockdowns and stay-at-home orders.

Other elements that are affecting healthcare costs include the rise in new medical technologies, more severe healthcare claims and specialty drugs. These can all set employers back a pretty penny.

Keys to manage high healthcare costs

Curbing your company’s healthcare costs can be tough in the current economic climate with high inflation rates. One way that employers are trying to save money is by targeting the costs of employees dealing with complex chronic health conditions.

Treating chronic illnesses like diabetes and heart disease can get expensive – and these are common conditions many employees have. Not only is the health care these conditions require costly, they can hurt the bottom line even more when looking at how they impact absenteeism and productivity, as well as additional costs if you’re having to pay disability and workers’ comp.

That’s why many employers are investing in company wellness programs to prevent these conditions before they start, encouraging their employees to adopt healthy behaviors like exercising, healthier eating and stress management to keep them from developing these costly conditions.

Giving employees incentives for keeping up with their preventive health care (e.g., lower deductibles for keeping up with annual checkups and screenings) is also beneficial to curb these issues.

In addition, it can be helpful to look at other ways to decrease costs across your health plan, such as encouraging employees to use generic drugs when possible and making sure they’re using healthcare providers that are in your health plan’s network.

You may also want to explore offering employees additional benefits to improve their overall health and well-being, which can lower costs on its own.