🔒Employers in 2024 will seek to add value, minimize costs for health benefits

Employers will be challenged to absorb higher healthcare cost increases in 2024.

However, with inflation stressing their employees’ household finances, budget concerns must be balanced with healthcare affordability and the need to offer attractive benefits to recruit and retain employees.

Employers projected an average cost increase of 5.4% for health benefits in 2023, and should be prepared for continued accelerated cost growth in 2024 and beyond.

Sixty-four percent of employers recently surveyed for Mercer’s annual health and benefit strategies survey said they plan to make enhancements to their health and well-being offerings in 2024.

Yet, only 3% of employers intend to shift costs to employees through plan design changes to lower their projected cost increase.

This indicates a focus on adding value for employees while minimizing cost-sharing.

Here are some actions employers can take to avoid cost-shifting to employees while managing rising healthcare costs.

1. Implement targeted programs for specific health conditions, such as diabetes, musculoskeletal issues and pain management.

These programs can help improve health outcomes and reduce costs by providing specialized support and resources to employees with these conditions.

2. Manage the cost of specialty prescription drugs.

Employers can explore strategies such as formulary design, utilization review and negotiation with pharmaceutical companies to ensure cost-effective access to necessary medications.

3. Expand virtual care offerings beyond standard telemedicine.

This can include providing access to virtual specialists, like dermatology, reproductive care and cardiology, remote monitoring technologies and digital health platforms.

4. Steer members to quality care with navigation or advocacy services to help employees make informed decisions about their care.

Another 2024 focus area for employers will be helping employees effectively deal with stress and manage their mental health. Here are some strategies to do that.

1. Enhance employee assistance programs (EAP) to provide employees with increased access to mental health support.

This may include increasing the number of sessions offered.

2. Conduct anti-stigma campaigns and encourage the use of behavioral health resources.

These campaigns aim to create a supportive environment where employees feel comfortable seeking help. Some organizations involve members of the C-suite to reinforce leadership support and share personal experiences with using mental health resources.

3. Train managers and increase mental health and/or substance use screenings in the workplace.

By equipping managers with the knowledge and skills to identify signs of mental health concerns, they can effectively connect employees to appropriate resources before the concerns become acute.

4. Provide digital or in-person resources for stress management and building resilience.

These resources may include stress management programs, mindfulness training, employee wellness initiatives and access to digital mental health resources.

5. Increase paid time off and work flexibility.

Employers are recognizing the importance of work-life balance and flexibility. Approximately one in four employers provide unlimited paid time off to at least some employees.

This approach allows employees to have more control over their time and supports their overall well-being.

Employers can also take steps to address the needs of women and diverse populations.

This can include offering free or low-cost coverage options, adding coverage for doulas, midwives and birthing centers, or covering fertility treatment without requiring a clinical definition of infertility or helping to cover surrogacy expenses.

By implementing these strategies, employers can effectively manage healthcare costs without shifting a significant burden of costs to employees.

Meg Galistinos is a partner and CT leader at consulting firm Mercer.

Check out the rest of HBJ's 2024 economic forecast issue