During the second year of the pandemic, area businesses continued to steer away from making large changes to their health plans while trying to minimize increasing benefit costs for employees.
This month, the Lancaster-based Central Penn Business Group on Health (CPBGH) released its annual Healthcare Benefits Survey. The survey features participating employers from 86 companies spanning Adams, Berks, Cumberland, Dauphin, Lancaster, Lebanon and York counties.
The survey found that this year that the average cost for health care coverage was slightly lower for single coverage and slightly higher for family coverage, but both individual employees and covered families paid slightly more for their coverage in 2021.
“We have been watching health care costs increase for the last four decades – everyone is paying more, yet most of the strategies utilized to help control costs have not worked,” said Diane Hess, advisor to and former executive director of the CPBGH. “I do believe though that being in the middle of a pandemic is not the time to make the drastic changes necessary to affect costs and quality, so I do not expect to see major changes in plan offerings or plan costs next year either.”
The most prominent way to manage cost among the survey’s respondents was increasing employee premiums with 73% of participating companies noting that they had increased employee cost share for coverage. Hess said that for an employer looking for an immediate impact on the company’s bottom line, increasing premiums continues to be an easy to implement option.
“Strategies such as employee education and plans to improve employee health through wellness initiatives may or may not have the desired impact and you also do not see immediate results,” she said.
The average out-of-pocket costs for both a single person and a family were up from 2020 with the average out-of-pocket for an individual being $5,723 and $11,559 for a family.
The average deductible among the survey’s respondents was $2,315 for an individual and $4,608 for a family. Those deductibles were higher among smaller employers and lower among larger employers with over 200 employees.
Employers also reported an average medical plan cost increase by 5.07% this year and predict a higher rate of increase of 9.2% next year.
Lancaster-based High Company’s, one of the respondents on the survey and an employer of over 1,500 people, has managed to avoid cost increases on its health plans since 2019, but is looking at a 4% increase in 2022, said Liz Ford, compensation and benefits director at High Company.
“For us, [cost savings] is really about understanding our data—it’s a lot of small changes that add up over time,” said Ford. “There is no big magic silver bullet for cost savings for us. It’s about being smart about plan design, prescription formulary and educating employees about where to go.”
The survey’s respondents employ over 26,000 people. 43% of respondents had between 50 to 199 employees, 27% had between 1 and 49 employees and the remaining 30% had over 200.
A large majority, 96%, of companies with over 200 employees self-insured their plans. For High, this allows the company to have better access to employee health data. It also means that it is up to the company to educate employees on how to save on out-of-pocket expenses.
“Like all employers, our deductibles have gotten higher,” said Ford. “Being self-funded, it’s about making them aware of the things they can do to reduce expenses. We communicate to them to get their lab work done in an independent lab and use more virtual care.”