The total cost of health benefits for employees increased an average of 4.9 percent this year, to $10,733 per employee, according to a statistically valid survey of three dozen Utah companies by consulting firm Mercer.
Nationally, the cost increase was 4.1 percent, the smallest since 1997, as companies moved more employees into cheaper consumer-directed health plans and stepped up their cost-management efforts. Employers spent an average of $10,558 per employee.
In Utah, the hiatus is expected to be short term. The Mercer-surveyed employers said their costs would rise by 9.6 percent next year if they made no changes to their current plans. Because many are making changes or switching insurance companies in search of lower rates, they expect to hold the increase to 6.8 percent, although for some costs could be much higher .
By contrast, employers across the U.S. expect a 5 percent increase in 2013, according to Mercer. But, as in Utah, the "relatively low" jump reflects changes they plan to make to reduce costs. Without changes, their expenditures would rise by an average of 7.4 percent.
Nicole Cozzo, a Mercer principal in Salt Lake City said costs will rise next year as more elements of the Affordable Care Act phase in. Employers will have to cover more employees than they have in the past or pay a penalty, she said.
Several Utah companies that weren’t contacted by Mercer said their 2012 cost increases were less than in previous years. None could point to specific reasons, but some speculated privately that insurance companies may have been trying to buy their business. The political climate in Washington may have been a factor, too, they said.
Mercer’s survey of Utah employers also found:
- 82 percent will shift more cost to employees next year by raising deductibles, co-pays, out-of-pocket minimums and employees’ share of premiums.
- 69 percent offered a consumer-directed health plan with an attached health savings or reimbursement account in 2012.
- 6 percent said they probably will terminate their medical plans within five years.
