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The overwhelming majority of U.S. employers (94%) say managing healthcare benefit costs will be their top priority over the next two years, followed by enhancing mental health benefits (87%), according to a new survey by Willis Towers Watson.

Additionally, nearly all employers expect to offer virtual care to meet demand for medical and behavioral health services, WTW’s recent 2202 Emerging Trends in Health Care survey found. A total of 636 U.S. employers who employ 10 million workers participated.

“Many employers find themselves in the middle of a perfect storm,” said Lindsay Hunter, senior director, Health and Benefits, WTW. “Inflation and rising healthcare costs, ongoing emotional and physical wellbeing needs, and attraction and retention challenges caused by a tight labor market are driving employers to carefully evaluate their benefit programs and strategies.

“In particular, they are looking for ways to make healthcare more affordable for themselves and their employees,” Hunter said.

When asked what their greatest challenges will be to effectively deliver on their healthcare strategy over the next two years, 73% of employers cited increasing healthcare prices due to rising inflation and provider consolidation. More than half (54%) identified a lack of employee awareness about where to find programs to support their needs as a key challenge.

The pandemic and the shift to remote work have contributed to a worsening of mental health among employees and their families. In response, two-thirds of employers surveyed (66%) said ensuring that their health and wellbeing programs support remote workers will be a key priority of their healthcare strategy over the next two years; 62% plan to enhance programs and wellbeing activities to focus on health issues of family members.

As the pandemic subsides, virtual care is positioned to become an essential and long-lasting feature of employers’ healthcare strategies. By the end of 2023, most employers (95%) are expected to offer virtual care for medical and behavioral health issues, and 61% expect to offer lower cost sharing for virtual care. Over half (55%) think the expansion of virtual care will help decrease costs in the long run, and 50% think it will improve outcomes.

Employer confidence about sponsoring healthcare benefits over the next 10 years is at its highest point in over a decade (84% in 2022 versus 38% in 2011). Nevertheless 64% of employers said they will take steps to address employee healthcare affordability over the next two years. These approaches include improving quality and outcomes to lower overall cost (55%) as well as adding or enhancing low- or no-cost coverage for certain benefits (41%).

Additionally, over the next two years nearly one-third (32%) of employers expect to make changes to their employees’ out-of-pocket costs, while 21% expect to make changes to their health plan payroll contributions.

The survey also found that employer interest in genomics benefits is increasing as testing options and treatments advance. For example, one in 10 employers (9%) currently offer genetic testing as a screening for early-stage cancer with another 5% planning to do so by 2023.

WTW is a global advisory, broking, and solutions company that provides products and services to clients to help them manage risk, cultivate talent, and optimize benefits. Go here for more information about the health benefits survey.