Editor’s note: Each Wednesday, Talk Business & Politics provides “Health Beat,” a round-up of health-related topics.
NEXT PHASE OF ACA TO BRING MORE CHANGES, CHALLENGES TO EMPLOYEE BENEFIT PLANS
Despite already modifying their benefit plans last year, employers expect their health care costs to rise again in 2016, which will require additional changes, according to the Employee Benefits Trend Study released by Wells Fargo Insurance. Fifty-eight percent (58%) of employers surveyed expect their medical plan costs to exceed the thresholds for the Affordable Care Act (ACA) excise tax, or “Cadillac” tax, which originally was to take effect in 2018, but has been delayed until 2020. Additionally, 70% of employers expect their budgets for benefit plans to increase, as human capital and health and productivity remain key issues for businesses to manage.
The Employee Benefits Trend Study surveyed more than 650 middle-market companies and large corporations to better understand how organizations are responding to health care reform requirements, while also developing a competitive benefits strategy.
HEALTH CARE SPENDING GROWS 4.9% IN DECEMBER, REPORT SAYS
Preliminary estimates show health spending grew only 4.9% in December 2015 compared to December 2014, continuing a steady decline from a peak of 6.8% in February 2015, according to monthly data from Altarum Institute’s Center for Sustainable Health Spending. Spending on hospitals and prescription drugs, each of which is growing at less than half the rate observed in February, led the decline.
For 2015 as a whole, health spending growth averaged 5.9%, the highest rate since 2007, the year preceding the recession. The health sector added a robust 36,800 new jobs in January, a quarter of all new non-farm jobs. Nearly two-thirds were in hospitals, which added 23,700 jobs, twice as many as the 12,000 jobs added in December. Consistent with the pattern over the past few months, health jobs grew 3.2% year-over-year, while non-health jobs grew 1.7%, putting the health share of total employment at 10.71%, a new all-time high.
STUDY SHOWS MOST LARGE EMPLOYERS NOW OFFER HIGH-DEDUCTIBLE HEALTH PLANS, MILLENNIALS TOP TAKERS
Benefits management firm Benefitfocus Inc. has released its inaugural study of more than 700,000 people at 500 large employers that shows that 52% of large employers on the company’s platform now offer high-deductible health plans (HDHPs).
One of the most significant findings was that millennials — born between 1980 and 1989 — selected HDHPs more than any other age group. However, while approximately 44% of employees in this group chose HDHPs, a much smaller number of these employees took full advantage of health savings accounts (HSAs), leaving a significant amount of tax-free money on the table that could offset high deductibles. To view the report, click here.