Employee Benefits
The issue on everyone's mind all year has been (and continues to be) whether or not Congress will pass a health care reform bill. It appears likely that some sort of health care reform will pass relatively soon. It is also likely that the most heated debate between the Democratic-controlled House and Senate is whether or not the health care reform bill will contain a government-backed public option or non-for-profit benefit exchanges. Even if health care reform does pass, however, any effect on medical costs likely won't be felt until at least 2012.
While the discussions about major health care reform rage on, numerous other legislation – both federal and state – have been added to the tangle of laws affecting employers and employee benefits:
- COBRA 65% subsidy
- HIPAA compliance and security expansion
- Dependent age limit extensions
- Mental Health Parity Act expansion
In 2009, employers saw an average increase of approximately 10% in the cost of health insurance premiums for both single and family coverage1.
In addition to being responsible for paying more of the health care tab, employees are also being asked to become healthier people and better health care consumers. In an effort to improve employee health, wellness programs continue to be a focus for insurance companies and employers. As a starting point, almost all insurance providers are offering online health risk assessments, and more and more employers are making routine physical exams a requirement for medical coverage eligibility. To help employees become better health care consumers, tools and services that allow employees to "shop" for the best price for prescriptions and common medical procedures are cropping up via carrier Web sites and wellness support services.
Our predictions for 2010 include the likelihood of health care cost increases – which may be slightly dampened by the struggling economy – hanging around the 8-10% mark. We expect that cost-shifting to the employee base will continue into 2010 through increased employee contributions as well as higher deductibles, co-pays and out-of-pocket expenses. Furthermore, if health care reform is, in fact, pushed through, FSAs, HSAs and insurance company wellness programs will more than likely become casualties. One thing is certain: we are in for a year of uncertainty in employee benefits.
1Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009
