Pension & Benefits News Employers budget an average of $11,891 per employee for health care
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Tuesday, December 3, 2019

Employers budget an average of $11,891 per employee for health care

By Pension and Benefits Editorial Staff

In 2019, large employers budgeted an average of $11,891 per employee for health care premiums, up 3.2 percent from 2018, according to recent research from Aon plc. The analysis of the firm’s Health Value Initiative database found that employers were successful at mitigating higher underlying medical cost trends through plan design changes, network strategies, vendor negotiations, and other initiatives.

Large companies paid approximately 78 percent of the health plan cost. Specifically, in 2019, employers paid $9,290 per employee for premiums (up 3.5 percent from $8,978 in 2018). Employees paid $2,602 in 2019 for premiums (up 2.1 percent from $2,550 in 2018).

Move from shifting costs to managing them. Employers are increasingly looking to manage cost increases through means other than shifting cost onto employees, according to Aon. The majority of cost increases are expected to come from high cost claimants (where a common rule of thumb is that 20 percent of claimants generate 80 percent of medical costs) and from specialty drugs (a market expected to account for half of the U.S. prescription drug spend by 2020 and grow exponentially each year).

“Affordability of health care is already a major challenge,” said Will Sneden, U.S. Health Solutions practice leader for Aon. “Employers are having to be more creative with their health strategies to control costs and use more insightful tools to help them make better decisions, both for themselves and for their employees.”

SOURCE: www.aon.com

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