2009 Health Benefit Cost Increase to be Lowest in a Decade

September 4, 2008 (PLANSPONSOR.com) - Preliminary survey findings from Mercer indicate health benefit cost growth could be 5.7% in 2009 - the lowest increase in more than 10 years.

The average health benefit cost per employee increased 6.1% in 2007, according to a Mercer news release. The complete results of Mercer’s National Survey of Employer-Sponsored Health Plans 2008, including the actual cost increase for 2008, will not be released until later in the year.

For the 1,317 plan sponsors that have responded to the survey so far, the total cost to renew their current health plans if they were to make no changes would grow by nearly 8% on average (10% for small employers with 10 – 499 employees). However, the majority of respondents indicated they will take steps to lower their actual cost increase.

Nearly six in 10 employers (59%) who indicated they will take action to reduce their 2009 cost increases will raise deductibles, copayments, coinsurance, or employee out-of-pocket spending limits, the news release said. Nearly 20% reported they will reduce costs by adding a consumer-directed health plan (CDHP) with a health savings account or health reimbursement account to their offering to employees.

Among respondents who currently offer a CDHP the predicted cost increase averaged 4.5%, compared to 6.4% for respondents not offering a CDHP.