With annual enrollment approaching, employers and employees alike are at heightened levels of concern over the potential for significant increases in premiums and their potential to trigger increases in employer and employee contributions as well as point of purchase cost-sharing (deductibles, copayments, coinsurance, etc.). A near confirmed national recession, coupled by an ever-increasing rate of inflation, has Americans anxious over “what’s next” in terms of cost increases that will add to their financial stress.
Jack Towarnicky, member of aequum and ERISA/Employee Benefits compliance and planning attorney, provided eHealth Radio Network’s host and listening audience with insights and guidance for a holistic “health and wealth” approach to health plan planning that incorporates the most effective strategies available to address today’s inflation and economic challenges.
To listen to Jack’s interview with ehealth Radio Network, click here.
Key Insights Include:
- What is the expected impact of current inflation and economic trends on employer-sponsored coverage?
- What can employers and employees do about the looming increase in medical costs for 2023?
- How should employers and employees be thinking about health plan renewals for 2023?
- What actions should they be taking now?
Predictions of double digit increases in the cost of medical coverage are increasingly prevalent. For employer-sponsored coverage, participants should expect to see the cost of coverage increase in 2023, along with contributions. Employers expect medical plan costs per employee to rise 5.6 percent on average, HR consultancy Mercer reported. While significantly higher than the premium increase of 4.4 percent expected for 2022, the 2023 increase lags overall inflation, which is currently running at about 8.5 percent year over year.
According to Jack, inflation is compounded by a large segment of American workers who are already financially fragile – living paycheck to paycheck and unprepared for regular household expenses, let alone unexpected, out-of-pocket medical expenses. Data show that Americans are now carrying unprecedented amounts of consumer debt – The Federal Reserve estimated the total amount of household debt as $16.15 Trillion.
Employers and participants must actively prepare for annual enrollment “now.”
To counter inflationary trends, Jack recommends plan sponsors focus on helping participants build savings rather than spend more to purchase a higher level of coverage. One of the best strategies is to leverage Health Savings Accounts (HSAs) as part of a rewards strategy designed to optimize both savings and financial preparedness.
As your partner, aequum helps lower costs, achieve savings and support your plan member experience and success in 2023 and beyond. Please contact us if you have any questions or need support. For more information, visit www.aequumhealth.com.