09 Nov It’s 2021, but 2022 is coming – health insurance premiums increasing
By Grant Dattilo
What, if anything, can employers do to mitigate expected increases in 2022 employee health insurance premiums? Mercer predicts an average 4.7% increase, while Willis Towers Watson says to look for 5% increases.[i] Some employers, however, are seeing far greater increases.
The projected premium increases are based on “Rising costs and increased utilization fueled by a resurgence in deferred care,” according to Julie Stone, managing director, health and benefits, for Willis Towers Watson. She adds that, “Employers must now address the Delta variant,” while encouraging employees to get the care they need.”[ii]
For Premium Increases, “What’s the starting point?”
All cost increase projections use the same starting point, that is, what are the costs today? If premiums today are already greater than they ought to be, a 5% increase on those already-expensive plans only makes what is bad measurably worse. On the other hand, if today’s premiums are less, a 5% premium increase will be more tolerable in dollars spent.
The best way to mitigate future premium increases, then, is to find a less-costly health benefit plan for today. Are there, however, health plans that provide the broad coverage employees prefer but at less cost? Are there alternatives to the standard plans common to most employers?
At DCI, we have been offering the BENIC plan (Benefit Employers Not Insurance Companies) for many years. Using the BENIC concept, we have been able to design comprehensive health plans for small employers to provide high quality health insurance for employees, but at 40% premium savings compared to standard plans.
We take advantage of federal and state tax law, rules, and regulations to maximize the employer’s options. We create competition among insurance carriers to further reduce premium, and provide backroom support to help administrators maximize savings.
We do not claim that employers with BENIC plans will be spared premium increases. As long as individuals spend medical care dollars, and the cost of care continues to increase, so must premiums. We do know, however, is that we have designed BENIC plans employers and employees embrace, for much the same reasons:
1) confidence that they’ll have access to necessary care when they need it, and
2) less costly monthly premiums, meaning more employer profit and more money on employee paychecks.
Even while we are working through renewals there are opportunities to explore alternative plan designs – like the BENIC plan – to reduce baseline cost today so as to enjoy reduce future cost.
Contact us for more information.
[i] https://www.benefitspro.com/2021/10/13/employers-look-for-ways-to-maintain-quality-while-holding-line-on-costs-in-2022/?slreturn=20211004145554
[ii] Ibid.
