Byline: Amanda Eisenberg
The rising cost of healthcare - and the pressures associated with pushing more of the cost onto employees - is causing a shift to self-insurance (Links to an external site.)Links to an external site. among employers (Links to an external site.)Links to an external site..
According to a new survey by insurance brokerage Arthur J. Gallagher & Co., 54% of 3,000 U.S. employers polled are paying at least 5% more for employee medical insurance this year, with nearly a quarter of companies paying at least 10%. And the cost will continue to go up.
The trend of switching from fully insured to self-insured is expected to grow from 28% to 38% in the next two years, according to the "Benefits Strategy & Benchmarking Survey." …show more content…
"That's where you see the movement to self-insurance. They can control how their dollars are being spent."
Self-insurance gives employers the ability to curb costs by personalizing pharmacy and medical plans they can offer their workforce, Neumaier says.
The fast turnover rate can be attributed to the "explosion in healthcare costs," with inflation rates for insurance carriers hovering around 8%, and prescription drug costs running closer to 12% to 15%, says Jim O'Connor, CEO of CBIZ Employee Services Organization.
As specialty drugs continue to rise in price, employers are looking for a stand-alone pharmacy program that meets their needs, Neumaier adds.
Gallagher estimates 54% of companies will soon have a stand-alone program, up from 36%. Other options for reining in costs, such as defined contribution arrangements and access to a private exchange, will triple by 2018. Now, fewer than 5% of employers are adopting these schemes.
"We're constantly pushing the boundaries to control costs," Neumaier says. "Other than recruiting and retaining employees, controlling costs is one of the main …show more content…
Monthly access to data can help HR professionals map out employee benefits more efficiently, a problem reported in the Gallagher survey.
"You can lay out a multiyear strategic plan, but when 12 months from now your health insurance (Links to an external site.)Links to an external site.carrier gives you a significant increase in cost, that at times can disrupt your longer-term plans," O'Connor says.
Only 8% of employers surveyed use a multiplanning process with multiple data inputs for compensation and benefits planning, compared to 76% of employers that plan their benefits year to year.
He recommends that midsized employers look to self-insurance to combat those unexpected costs, as long as they have the "right demographics, the right financial strengths and the right access to plan administrators." This can be done by tweaking or modifying variables based on the industry, workforce geography or age.
The continued advances in medical technology, even beyond data and analytics, can help employers enhance their healthcare benefits.
Employers and employees are increasingly seeing telemedicine as an added benefit, with nearly a quarter of employers offering the option. Gallagher predicts access to telemedicine will reach 42% by
The rising cost of healthcare - and the pressures associated with pushing more of the cost onto employees - is causing a shift to self-insurance (Links to an external site.)Links to an external site. among employers (Links to an external site.)Links to an external site..
According to a new survey by insurance brokerage Arthur J. Gallagher & Co., 54% of 3,000 U.S. employers polled are paying at least 5% more for employee medical insurance this year, with nearly a quarter of companies paying at least 10%. And the cost will continue to go up.
The trend of switching from fully insured to self-insured is expected to grow from 28% to 38% in the next two years, according to the "Benefits Strategy & Benchmarking Survey." …show more content…
"That's where you see the movement to self-insurance. They can control how their dollars are being spent."
Self-insurance gives employers the ability to curb costs by personalizing pharmacy and medical plans they can offer their workforce, Neumaier says.
The fast turnover rate can be attributed to the "explosion in healthcare costs," with inflation rates for insurance carriers hovering around 8%, and prescription drug costs running closer to 12% to 15%, says Jim O'Connor, CEO of CBIZ Employee Services Organization.
As specialty drugs continue to rise in price, employers are looking for a stand-alone pharmacy program that meets their needs, Neumaier adds.
Gallagher estimates 54% of companies will soon have a stand-alone program, up from 36%. Other options for reining in costs, such as defined contribution arrangements and access to a private exchange, will triple by 2018. Now, fewer than 5% of employers are adopting these schemes.
"We're constantly pushing the boundaries to control costs," Neumaier says. "Other than recruiting and retaining employees, controlling costs is one of the main …show more content…
Monthly access to data can help HR professionals map out employee benefits more efficiently, a problem reported in the Gallagher survey.
"You can lay out a multiyear strategic plan, but when 12 months from now your health insurance (Links to an external site.)Links to an external site.carrier gives you a significant increase in cost, that at times can disrupt your longer-term plans," O'Connor says.
Only 8% of employers surveyed use a multiplanning process with multiple data inputs for compensation and benefits planning, compared to 76% of employers that plan their benefits year to year.
He recommends that midsized employers look to self-insurance to combat those unexpected costs, as long as they have the "right demographics, the right financial strengths and the right access to plan administrators." This can be done by tweaking or modifying variables based on the industry, workforce geography or age.
The continued advances in medical technology, even beyond data and analytics, can help employers enhance their healthcare benefits.
Employers and employees are increasingly seeing telemedicine as an added benefit, with nearly a quarter of employers offering the option. Gallagher predicts access to telemedicine will reach 42% by